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Q1 chip sales plunge reveals slowing demand for netbooks

Fad finished?

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Demand for Intel's netbook-oriented Atom processors plunged in Q1, but only from computer manufacturers, it seems.

Market watcher IDC this week said that Atom shipments were down 33 per cent during the first three months of 2009 when compared to the final three months of 2008.

So no one wants netbooks now? Not necessarily. IDC reckons that's a sign that computer makers built up big stocks of Atoms during the latter part of last year. During Q1 they were burning through their inventory, the researcher said.

Still, that doesn't imply strong demand from consumers. Said excess inventory suggests vendors' sales expectations were not met - that's why they had Atoms to spare at the end of Q4 2008 - which in turn means demand wasn't as strong as anticipated.

However, that's more likely to be a response to recession than a sign the netbook fad is over.

IDC said it believes Atom accounted for 21 per cent of Intel's shipments of mobile processors during Q1 but only 6.5 per cent of revenues of said.

So almost a quarter of laptop CPU shipments yielded less than a tenth of the money - not a trend Intel would want to encourage, surely?

Worldwide PC CPU shipments dipped as a whole between Q4 2008 and Q1 2009, IDC said, down 10.9 per cent following a dip between Q3 and Q4 2008 of 17 per cent. Unit shipments fell 13 per cent between Q1 2008 and Q1 2009.

Q1 sales revenues were down 11 per cent sequentially and 25.1 per cent year on year, IDC said.

Intel's market share fell 4.7 percentage points to 77.3 per cent in Q1, while AMD's went up by almost the same margin, to 22.3 per cent. ®

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