As Intel's Atom gains, Apple still holdout

Chipmaker's Atom is proving to be a very popular chip, but is it too low-rent for Apple?

Intel's Atom is proving to be a very popular chip. But is it too low-rent for Apple?

First the news. iSuppli reported Monday that Intel gained share, based on revenue, in the global microprocessor during every quarter of 2008 to finish up with 80.5 percent of the total processor market--a 1.6 percent gain over rivals--partly due to the success of its Atom chip in Netbooks.

Would a hypothetical Apple Netbook be a high-end product like Sony's Vaio P line?
Would a hypothetical Apple Netbook be a high-end product like Sony's Vaio P line? Sony

"Intel's low-priced Atom has become increasingly popular as the Netbook market has gained steam," Matthew Wilkins, principal analyst, compute platforms research, for iSuppli, said in a statement.

Worldwide unit shipments of Netbooks soared by more than 2,000 percent in 2008 and are expected to rise by about 68 percent in 2009, iSuppli said.

Not surprisingly, every major computer maker has announced a Netbook--some, like Toshiba, begrudgingly--and others, like Dell, seemed, at least initially, to put a product out there just in case.

Hewlett-Packard--one of the early leaders in the market--came out (back in April 2008) first with an upscale business-class "Mini-Note" Netbook, but since then HP has added a lower-cost consumer-focused HP Mini 1000 series too. All HP Netbooks now use the Atom processor after a brief flirtation with a Via processor (used because HP developed its Mini-Note before Atom was available).

Sony finally chimed in this year with the a luxury Netbook--the Vaio P series, which ranges in price from $900 to $1,499 with a 128GB solid-state drive and 2GB of memory--both atypical for an Atom-based system.

But not Apple. Now about a year after Intel rolled out the Atom brand. A Russian magazine has posted a pretty compelling mock-up of what an Apple Netbook could (should?) look like. The magazine even proffered some believable specs that were slightly off-kilter--a typical Apple product strategy: a 1.86GHz Atom Z540 (typically not used in Netbooks, most vendors default to the 1.6GHz N270), a 64GB solid-state drive (not unheard of in Netbooks but certainly not common), and, most interestingly, an Nvidia chipset and Nvidia graphics.

One of the challenges Apple faces with a luxury Netbook configuration like this is that it comes uncomfortably close to its pricey MacBook Air, which also offers Nvidia graphics and solid-state drives. This, of course, could change if Apple updates the Air with a more upscale configuration.

Or Apple could bring out an un-Netbook (Apple, of course, will dare not speak the name "Netbook") like Sony but trump Sony by using an inexpensive Intel Core 2 ultra-low-voltage (ULV) processor (due by early summer) that keeps it up-market but far enough below MBA territory.

That said, if Apple goes the Atom-based Netbook route, it will not be immune from the inevitable cannibalization that Atom brings with it.

Some potential MacBook Air buyers would look at a 10- or 11-inch Apple Netbook and say why pay the $1,000 premium? Maybe too many for Apple's taste. We'll see.