Intel Q1 income down 55%, Atom sales drop

Intel on Tuesday reported its first-quarter financial information, showing a 55-percent drop in income while revenue slid 26-percent to $7.1 billion year-over-year. The company also experienced a drop in gross margin from 53 percent last year to 45.6 percent this year, explained by higher factory-underutilization charges and startup costs.

Despite the growth of the netbook segment, sales of Atom processors and chipsets fell 27 percent sequentially. In April of last year, the company was said to be experiencing a shortage of the components and less than 40 percent of the requests were being met.

Reacting to the netbook boom, other chip-makers such as AMD have developed competing products. VIA is also working on new CPUs for small portable devices, with the Nano E-series featuring a 1,333MHz front system bus speed expected to arrive soon. Qualcomm and Freescale recently announced plans to expand their ARM-based component offerings for netbooks.