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MID, Netbook Forecast Promising

Intel is banking on its new Atom processor to give an extra boost to the nascent mobile Internet device (MID) and still-developing netbook markets.

Industry analyst Steve Baker, The NPD Group’s industry analysis VP, thinks these products have promise.

“Intel is right that people want a homelike Web experience in a mobile platform,” Baker said.

The MID and netbooks are intended to be something more than a PDA or smartphone, but less powerful then an ultra-portable notebook, said Intel’s Bill Calder. What each can deliver is full Internet connectivity on the go, he said.

The new MID will be about the same as a PlayStation Portable, but by using the Atom processor, it will have the ability to fully display Internet information. Atom processors measure 25 nanometers in size and utilize the Intel Core 2 Duo instruction set, which is what will deliver the better Web experience, Intel said. The processors will run in the 0.6-watt to 2.5-watt range and at speeds up to 1.8GHz, giving small devices a useful amount of battery life, Intel said.

“The mobile Internet experience is limited on a BlackBerry. It does have Internet access, but the experience is different from what you get on a PC or a MID,” Calder said.

Baker agreed, saying with the right form factor, MIDs could be quite successful.

Intel has shown to vendors and the press several reference designs. These included one with a flip-up screen and another with a slide mechanism like the LG Chocolate cellphone. The devices could use Wi-Fi, 3G cellular, WiMAX or a combination of these to connect to the Web. Pricing will be set by the final vendor.

Intel has not announced any partners, but the company believes MIDs will be developed by both cellphone and PC makers.

The netbook category has a better chance of success outside the United States, where cost is more of an issue. Calder compared netbooks to the current Asus Eee PC.

“This category is set to take off,” he said, adding that Asus sold 350,000 Eee PCs during the fourth quarter last year.

About 10 percent of these Eee PCs were sold in the United States

Intel said the next generation of the Eee PC will be equipped with the Atom processor this year, replacing the Mobile Celeron chip that now powers the unit. In addition, this will enable them to run Windows XP.

Worldwide Intel believes the market for netbooks will be in the millions, with most U.S. purchases taking place by people looking for a second notebook that would primarily be used for email and Web access.

Baker was not as certain about this claim. With netbooks carrying price tags comparable to those of inexpensive full-size laptops, there is some reason to believe netbooks will simply cannibalize those sales instead of adding incrementally to the total number of mobile computers sold.

Not every company is as high on the concept as Intel. Toshiba is giving both MIDs and netbooks a look, but it has no plans to go any further, said Dave McFarland, product management digital products division. About a decade ago, Toshiba rolled out the Libretto notebook, which arguably would have fit into the netbook/MID category. The company eventually pulled out of the ultra-notebook category.

Baker said it makes a great deal of sense for computer manufacturers to become involved in these developing categories, and he would not be surprised to see cellphone makers join in. There is also a case for the MID devices to find themselves on carrier store shelves since the most likely way people will access the Web is via a 3G service.