Intel sees no first-time PC buyers for netbooks

“The first time you buy something you want the real deal. It’s consistent not just in China,but all around the world.”

“If you’re going to spend your hard-earned money for the first time,you’re going to put a computer in your house,” he said.

Maloney said he doesn’t see that trend changing any time soon.

IDC analyst Bob O’Donnell agreed that first-time buyers might not be in the market for netbooks,but said the cost of Internet access might also be an issue.

“(First-time buyers) want full-size keyboards and they want full-size screens,but more importantly,the thing that people forget about is that it’s not the cost of the machine — it’s the monthly fee,it’s some sort of monthly Internet access.”

“The challenge in these developing markets is not just the cost of the machine — even if they get it down to $99,that’s not the point — the point really is that a year of Internet access is going to cost more than the machine,and that’s the bigger problem in these developing economies,” he said.

Intel executives from the world’s largest chipmaker earlier said they were aiming to introduce new people to computing through low-cost netbooks,particularly in emerging markets,as well as drive sales to people looking for a second machine.

Atom-based netbooks have been wildly popular among consumers and some analysts have questioned whether the small,laptop PCs will cannibalize sales of more expensive,full-function laptops.

Netbooks,so far,have sold most frequently to people who already own one or two PCs,Maloney said,but added that 7- to 11-year-old children are still a “massive underserved demographic.”

Executives on Wednesday showed the results of a UBS survey in which 77 per cent of netbook purchasers said they were buying a second PC.

Intel has cornered the fast-growing market for inexpensive netbooks,made for simple functions such as surfing the Web,with its “Atom” processors.

Earlier this month the company said second-quarter revenue for Atom processors and chipsets spiked 65 per cent from the first quarter to $362 million.

Sales of chips for laptops rose 16.7 per cent in the second quarter.

Maloney said netbooks,which the company launched in late 2007 with Taiwan’s Asustek,are now “well established” in global markets.

“There is a new category established. That category is,to an extent,maturing,” he said. “It is not so much in the early phases.”

Executives on Wednesday confirmed that the next-generation Atom processor,code-named “Pineview,” is on track to be shipped by the end of the year.

NON-US MARKETS

In wide-ranging remarks,Maloney said that while the US economy is still in recession,some of the company’s overseas markets,such as India and Brazil,were improving.

“If you are dependent on the US consumer,or US business alone,obviously you are in one box,” he said. “If you are global,you’re in another.”

“There are a number of countries,Brazil included,that actually seem to be coming back pretty quickly,” he said.

Overseas markets account for 80 per cent of Intel’s overall business.

“We exist in a series of microclimates in which the US,inevitably,demographically,is increasingly less important,” Maloney said.

Intel earlier this month blew past Street forecasts in its second-quarter earnings. Chief Financial Officer Stacy Smith said he saw strength in consumer PC sales,Asia-Pacific,and China.