Wave of Intel dual-core Netbooks to break

Intel announced on Monday the first dual-core Atom processor targeted specifically at Netbooks, finally putting the same number of processing cores inside these tiny laptops as found on larger mainstream laptops.

Acer, Asus, Lenovo, and LG all announced new dual-core Netbooks Monday. Fujitsu, Hewlett-Packard, MSI, Samsung, and Toshiba, among others, are planning similar announcements in the coming weeks and months, according to Intel.

This is a big step for the Netbook market. Since their inception back in spring 2008, Netbooks have been powered by single-core processors. This allowed Netbook suppliers to design 10-inch-class laptops that were relatively power efficient and inexpensive, typically costing about $350.

The widely reported downside has been lackluster performance, since all processing must be funneled through one core. The Atom performance gap with mainstream Core 2 Duo and Core i laptop processors is also due to design differences. (Mainstream laptop processors have a different architecture, delivering higher-level performance.) But the fact that the Atom for Netbooks has always been single core has exacerbated the performance gap.

Intel has other reasons for moving to dual core. Low-power dual-core processors from rival Advanced Micro Devices are already appearing in Netbook-class laptops. The Hewlett-Packard Pavilion dm1z, an 11.6-inch Netbook, uses an AMD Turion II Neo dual-core K625 processor (1.5GHz) and ATI Mobility Radeon HD 4225 graphics processor, offering potentially stiff competition for single-core Atom Netbooks.

The new dual-core Intel N550 Atom runs at 1.5GHz and supports DDR3 memory, another performance benefit.

Despite the expected crush of updated models, the Netbook now has a new nemesis: the iPad. "The death of the Netbook has been greatly exaggerated," said Bob O'Donnell, an analyst at IDC, referring to the rise of the Apple iPad and its impact on Netbook sales. Though O'Donnell doesn't discount the iPad effect, Netbooks are principally for consumers who want to use Windows on a small device--virtually impossible on an iPad--and they're less expensive than an iPad, to boot.

"Netbooks are still cheaper than iPads. And the kind of apps you run on an iPad are not the same kind of apps you run on a notebook," he said. "And even within those applications that are the same, like e-mail and Web browsing, the manner in which you surf the Web and the manner in which you do e-mail is different," he said.

Looking at the raw numbers, Netbook shipments still dwarf the iPad--at least this year they will. O'Donnell estimates that Intel has shipped roughly 20 million Atom processors for Netbooks this year and is expected to ship another 15 million or 20 million over the rest of the year. Intel said Monday that it has shipped about 70 million Atom processors for Netbooks in total to date.

That said, O'Donnell doesn't deny the negative effect that the iPad is having on Netbook numbers and said that IDC is revising its Netbook shipment figures accordingly.

A variety of analysts are forecasting anywhere between 10 million and 15 million iPads to ship in 2010.

Updated at 12:25 p.m. PDT: adding IDC comments and Intel chart.