The low-cost PC has found its market not in the developing world but unexpectedly in more mature markets, says Intel.
The devices, often small portables with basic features and are capable of accessing the Internet, has in past years been targeted toward emerging markets in rural countries. Examples of which are Intel's own Classmate PC, and the OLPC's XO laptop.
But Intel thinks mature markets are the device's next great opportunity.
Navin Shenoy, vice president and general manager, Intel Asia-Pacific, told ZDNet Asia that the chipmaker is targeting its new line of low power processors designed for low-cost PCs to both emerging and mature markets. While it is targeted toward children at the primary education level in emerging markets, low-cost PCs are expected to gain traction with a broader audience in mature markets.
"Users in the mature markets want these devices as companion devices to what they already have, as a second or third notebook," said Shenoy.
According to ZDNet Asia sister site CNET News.com reports, Intel was contemplating creating a processor for emerging markets back in 2003, but could not justify manufacturing volume-wise.
Bill Siu, who was general manager of Intel's Channel group said then: "You don't get the economy of scale with niche silicon...We're not focusing on a new piece of silicon for emerging markets."
Siu had added in the report that this position was dependent on volumes reaching beyond 50 million--which the company now predicts it will.
Intel last week announced plans to manufacture a new family of processors designed for MIDs (mobile Internet devices) and low-cost PCs. The Atom processors will be based on a new architecture targeted at low-powered devices and are trumped by the chipmaker as being its "smallest and lowest power processor yet".
Shenoy said: "[MIDs are] definitely not niche device[s] anymore," adding that Intel is expecting 50 million units of such devices to move by 2011.
Explaining the future of low-cost PCs, Shenoy said he is expecting there to be a more significant supply of such devices to the market in the coming years.
"There hasn't been a purpose-driven effort to build for this segment yet...with the success of [Intel's] Classmate PC and Asus' Eee PC, all of the sudden you have an industry building specifically for this market. Volumes will go up tremendously," said Shenoy.
A spokesperson for Asus in Singapore told ZDNet Asia that sales in the region has been "over-whelming", and confirmed the company is facing a shortage globally for Eee PC sets, which has led to many stores running out of stock.
Intel's new Atom will bring the company head-to-head with mobile device processor manufacturers such as ARM and Texas Instruments. ARM's low power chips are currently dominant in the mobile devices market.
Jim McGregor, In-Stat principal analyst, said in a report: "Intel's expansion into emerging form factors, such as MIDs, with low-power products expands its list of competitors, particularly those in the ARM processor camp."
Intel had previously been a part of the OLPC project, but dropped out in a high-profile spat late last year. The project had been reportedly dogged by unforeseen production costs nearly doubling the price of the machines and lukewarm reception by governments' education ministries.
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