Intel Predicts Ultra-Thin Notebooks Will Cannibalize Netbook Sales with Rapidly Falling Prices

PC makers have been decrying the impact of low margin netbooks on their bottom line for over a year now, but Intel is trying to calm their fears by making new predictions for the future of mobile computing. Numbers posted at the end of March peg netbook sales at around 16 per cent of all portable computer purchases, but Intel claims the steadily decreasing cost of ultra-thin laptops will help to keep that number from growing.  The ultra-thin category is traditionally dominated by new ultra low voltage CPU’s, which offer better performance than both Celeron, and Atom processors, with an increasingly more reasonable price premium. According to Intel’s marketing chief, Sean Maloney, "Atom is eating into Celeron. And we're quite fine with this".

Maloney predicts that ultra-thin laptops will start offering stiff competition for high end netbooks priced above $400, primarily because the price difference has shrunk in some cases to as little as a $200. Intel’s internal projections released during the May 12th presentation shows sales increasing exponentially near the end of the year, and clearly, this is where they expect to see the bulk of their growth in the portable PC market.

Intel predicts that future growth markets for netbooks will be children and cellphone providers who bundle 3G service with the computer to further subsidize the price to consumers. Do you think people only buy netbooks because they are cheap? Or are some people just looking for a good ultra-portable?