Since Qualcomm (QCOM) - Get Report officially coined the term "Smartbook" in late May 2009 to differentiate between Intel's (INTC) - Get Report Atom-based netbook and ARM's (ARMH) ARM-based subnotebook (now the Smartbook), the IT industry is moving in high gear to supplant Atom's dominance in the lucrative netbook/subnotebook market.
I pointed out on March 9, in press releases and blogs (before writing for
) that ARM processors, not Intel's Atom, will benefit from the current technology-economic cycle. I noted that while Intel's Atom dominates the market in 2009, a movement is under way that will enable the ARM processor to gain a 55% market share in 2012.
The term Smartbook now makes it easy for us analysts to differentiate between the two. Below is our forecast of the market:
are planning smartbooks. ARM runs under the Linux operating system. Linux is free, whereas
charges a licensing fee up to $35 on each netbook.
To further keep cost down near the intended $100 price point, enter cloud computing.
Linux-based Chrome OS offers an improved suite of productivity applications, which will influence netbook purchasers toward the ARM system. There is a wide array of open-source software that all Linux distributions share. It is reshaping the software industry by reducing the overall cost structure and represents the future of enterprise software.
As cloud computing becomes more sophisticated, we will see an Internet protocol-based convergence of audio, video, productivity applications and IT data run on ARM-based netbooks.
We also noted in a release March 9 that subsidized netbooks will start appearing: "Along with the growing competition among software service providers, we will see a new infrastructure taking hold, modeled after
(cheap printer, expensive ink) and the mobile service providers (cheap cell phone, expensive monthly wireless charge). This subsidized bundle model will grow the ARM netbook to greater market shares."
We were correct, and
seemed to think it was a good idea. The wireless provider started offering subsidized netbooks for as little as $49.99 in two markets, Atlanta and Philadelphia.
Netbooks are showing 3G connectivity rates 10 times that of notebooks. Kindle 2 from
is basically a mobile-phone platform. The processor is a
i.MX31 with an ARM11 core, and the 3G communication module uses a chipset from Qualcomm. Sales of netbooks bundled with 3G services in the Taiwan market reached 15,000 units in August, accounting for 50% of total retail sales.
Robert N. Castellano, Ph.D, is President of The Information Network, a leading consulting and market-research firm for the semiconductor, LCD, HDD and solar industries. Castellano is internationally recognized as one of the leading experts in these areas. He has nearly 25 years of expertise as an industry analyst. Castellano has provided insight on emerging technologies to many business and technical publications, including Business 2.0, BusinessWeek, The Economist, Forbes, Investor's Business Daily, Los Angeles Times Magazine, The New York Times, USA Today and The Wall Street Journal. He is a frequent speaker at conferences and corporate events. He has over 10 years' experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University before founding The Information Network in 1985. He has been editor of the peer-reviewed Journal of Active and Passive Electronic Devices since 1985. He is author of the book "Technology Trends in VLSI Manufacturing," published by Gordon and Breach. His book "Solar Cell Processing" was published in 2009 by Old City Publishing. He received his Ph.D. in solid state chemistry from Oxford University.