ARM processors gaining momentum in sub-notebook market

NEW TRIPOLI, USA: Since Qualcomm officially coined the term “Smartbook” in late May 2009 to differentiate between Intel’s Atom-based netbook and ARM’s 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.

We pointed out on March 9, 2009 in press releases and blogs that ARM processors, not Intel’s Atom, will benefit from the current technology-economic cycle. We noted that while Intel’s Atom dominate the market in 2009, a movement is underway that will enable the ARM processor to gain a 55 percent 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:

Netbook/Smartbook Market ForecastSource: The Information Network

Already, Lenovo, Nokia, Foxconn, Sony Ericsson, and Sharp are planning smartbooks. ARM runs under the Linux operating system. Linux is free, whereas Microsoft charges a licensing fee up to $35 on each netbook. To further keep cost down near the intended $100 price point, enter cloud computing.

Google's 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.

Smartbook/Netbook FeaturesSource: The Information Network

We also envisioned on March 9 that subsidized netbooks would start appearing. “Along with the growing competition among software service providers, we will see a new infrastructure taking hold, modeled after Hewlett-Packard (cheap printer, expensive ink) and the mobile service providers (cheap cellphone, expensive monthly wireless charge). This subsidized bundle model will grow the ARM netbook to greater market shares.”

We were correct and AT&T 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 ten times that of notebooks. Kindle 2 from Amazon is basically a mobile phone platform. The processor is a Freescale Semiconductor 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. Smartbooks, because of their design and need for cloud connectivity, will grow even stronger.