standard laptop shipments will outpace Netbook growth in 2010, according to Avian Securities

Growth of Intel-based Netbooks camcorder battery will slow this year, and the emergence of "smartbooks" based on chips from Intel rivals will also be poky, according to analysts.

Though Intel Chief Executive Paul Otellini was upbeat about Netbook growth in 2009 during the chipmaker's earnings conference call last week, standard laptop shipments will outpace Netbook growth in 2010, according to Avian Securities.

"The big surprise over the past couple years has been the emergence of Netbooks Inspiron 1520 battery, Inspiron 1525 battery. However we believe regular notebooks will likely outpace the growth in Netbooks in 2010," according to a research note from Avian published Tuesday. "For 2010 we expect regular notebooks to grow to 180+MM (million) from 140MM in 2009, with Netbooks growing to 47MM from 37MM," Avian said. (Netbook shipments came to about 10 million in 2008.)

The fact that PC makers need to make more money is one of the factors driving this trend. Netbooks are inexpensive--typically about $350--and not as profitable as more standard laptops. "PC (makers) have not given up on trying to find ways to recapture some of the margin lost when Netbooks became very popular over the past couple years."

The note continued. "With...regular notebooks becoming smaller/sleeker in size, while still offering a performance advantage versus Netbooks and selling for as little as $100 more for a basic model, we think that more consumers may be tempted to migrate back towards regular notebooks," Avian analyst Dunham Winoto wrote.

Intel Senior Vice President Sean Maloney echoed this sentiment to some extent when he addressed the ultrathin laptop market--a segment slotted just above Netbooks--in a CNET interview at the 2010 Consumer Electronics Show. Maloney said the ultrathin laptop Inspiron 1526 battery, Inspiron 1720 battery market is now beginning to take off after a slow start in 2009.

And smartbooks, the nascent rival to Intel-based Netbooks, may get off to a slower-than-expected start this year. Gartner's "Semiconductor DQ Monday Report," which focused on the 2010 Consumer Electronics Show, said that smartbooks based on power-efficient ARM chips from companies like Qualcomm, Freescale Semiconductor, and Texas Instruments, are still more concept than product.

"Fewer-than-expected actual products were announced, and most of the demonstrations were still in the prototype stage...We maintain that the smartbook market will take some time to develop, and semiconductor vendors will need to plan to be in the market for the long haul to get their return," Gartner said.

Gartner noted that the most interesting smartbook announcements were the Qualcomm Snapdragon chip-based Lenovo Skylight and smartbooks based on Nvidia's Tegra processor.
Avian Securities also wrote Tuesday that smartbooks are not yet ready for prime time. "Though we acknowledge some of the advantages of smartbooks over Netbooks, at this stage we feel that most Inspiron E1405 battery, Inspiron E1505 battery, Inspiron E1705 battery consumers have to make too many major compromises for the promise of longer battery life, which we think many are unlikely to accept."

AMD said it expects revenue to be down seasonally for the first quarter of 2010.

Advanced Micro Devices posted a fourth-quarter profit of $1.18 billion, its first profit in three years, largely due to a massive settlement with Intel laptop battery.

The $1.178 billion profit, or $1.52 per share, beat the analyst consensus estimate that had projected AMD laptop ac adapter to record a loss of 18 cents per share on revenue of $1.5 billion. In the same quarter last year, AMD lost $1.4 billion, or $2.36 per share.

The second largest global supplier of processors for PCs posted revenue of $1.646 billion, an increase of 42 percent compared with the same period a year ago.

Fourth-quarter AMD gross margin, an important indicator of profit, was 45 percent, compared with 42 percent in the prior quarter and 23 percent in the year-earlier period.

AMD stated that the "favorable impacts" on its net income were primarily from a legal settlement with Intel. During the quarter, Intel and AMD Inspiron 1100 battery, Inspiron 1300 battery announced a comprehensive agreement to end all outstanding legal disputes. As a result of this agreement, Intel paid AMD $1.25 billion.

AMD said it expects revenue to be down seasonally for the first quarter of 2010.
The erstwhile chipmaker is also putting more distance between itself and its former manufacturing operation, which was spun off in 2008 and became Globalfoundries. "We have deconsolidated Globalfoundries starting in Q1. Moving forward, you will see us report AMD results only," the company said in a statement. Globalfoundries will appear only as an equity investment in future AMD financial statements.

Notebooks a target as graphics chips surgeLaptops are a big target market for AMD in 2010, according to Chief Executive Dirk Meyer, who spoke during the company's earnings conference call on Thursday afternoon. "We're under-penetrated in that category of product," he said. "The broad (notebook) category represents an opportunity for us this year," he said.

AMD laptop processors are expected to become more competitive as the company moves most of its chips to a more advanced 45-nanometer manufacturing process. Intel, meanwhile, is in the process of transitioning to an industry-leading 32-nanometer manufacturing process.

The company shipped a record number of mobile "discrete" (standalone) graphics processing units (GPUs) in the quarter. And overall revenue in the graphics chip Inspiron 1501 battery segment was $427 million, a 40 percent sequential increase and a 58 percent year-to-year jump.

AMD could have shipped more GPUs but supply from its manufacturing partner Taiwan Semiconductor Manufacturing Company was "heavily constrained," Meyer said. In particular, AMD's new Radeon 5000 series of graphics processors have been well-received in the market.