Intel says ultra mobiles will rival PC market in 5 years

OEMs slated to ship first ultra mobile devices based on new Atom chip this quarter

With Intel betting so heavily on the mobile Internet device market exploding in the next several years, industry analysts are wondering if the fledgling business can live up to the expectations.

Intel this week unveiled its new low-power Atom processors, which are aimed at the embedded and mobile Internet device markets that Intel has heavily targeted. And they're betting big that it will quickly become a major business.

"We think the mobile Internet device market will be big," Anthony Yung, a spokesman for Intel, told Computerworld. "The Internet is going mobile. We see this as the next big opportunity for Intel over the next five or 10 years. The trend is to take a lot of the computing and Internet capacity to small devices. We'll see the market growing to the scale of the PC business in five to 10 years."

For a market now in its infancy to grow that fast in just five to 10 years would be an enormous growth curve - one that may not be realistic, especially with so many people satisfied with today's iPhones and other smart phones, said Charles King, an analyst at Pund-IT.

"You can divide Intel's products into two classes," added King. "There are products they sell tons and tons of, and then there's another class where Intel goes out on a limb and chases a market that is immature and entirely fictional. I think the company is taking a flyer on this market. I'm just not sure there's enormous commercial demand for them."

Mobile Internet devices are small, "pocketable" products that fall in between small laptops and smart phones in size and capability. While a high-performance ultra mobile device would be handy for, say, doing Web searches while on the go, the small keyboard and display add their own challenges. And with so many people attached at the hip with their smart phones, King wonders if they'll be quick to give them up or to cart another product around.

Gordon Haff, an analyst with Illuminata, a research firm, agrees.

"Frankly, there isn't much of a mobile Internet device market today," said Haff. "There are a lot of questions about how that market will develop. How many devices are people will to carry with them? What form will these devices take? How do smart phones, mobile phones and small laptops play out against each other?"

Intel's Yung, though, thinks he knows pretty much how it will play out. And he says smart phones aren't going to cut it when people want to be fully connected on the fly.

"Right now, people can't enjoy the full Internet experience when they're on the go," he said. "There's a need for a very high-performance [mobile] device. Web sites have a lot of video and graphics and they require a lot of performance. There's a lot of content you just can't take advantage of now."

Intel noted at its 040208_us_idf_wsj_news_300x250 in Shanghai this week that Fujitsu, Samsung, Toshiba, Hitachi and Lenovo all plan to sell mobile Internet devices based on the Atom processor.

Dan Olds, an analyst at Gabriel Consulting Group, said Intel just might be on the right track by betting big on the emerging devices.

"That market is definitely growing faster than the enterprise, both in the US and worldwide," said Olds. "It's probably is going to grow faster than PC's, but it is definitely more profitable. And that makes it a very attractive market."

Intel's Yung said OEM vendors are slated to begin shipping mobile Internet devices based on the new Atom process in this quarter.

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