The Atom's success may be waning—at least for now. Quoting "market sources," DigiTimes reports that demand for Intel's low-cost, low-power processor has fallen because of two major factors: competition from full-sized laptops that have undergone price cuts and the arrival of cheap ultraportables based on Intel's CULV Core 2 processors.
DigiTimes also attributes some of the netbook demand slowdown to consumers waiting for Intel's next-generation Atom CPU. The 45nm chip, code-named Lincroft, will have a graphics processor and a memory controller built into it. Lincroft should be out in the second half of this year. Until then, DigiTimes says Intel is trying to clear Atom inventory by prioritizing "second-tier and China-based vendors."
We can see evidence of lower Atom demand in Intel's earnings releases, too. A couple of weeks ago, Intel reported that revenue from Atom processors dropped from $300 million in the fourth quarter of 2008 to $219 million in the first quarter of this year. Part of that likely has to do with generally reduced consumer demand following the holiday season, though, of course.