Intel's mobility business takes hit in 1Q09

Intel reported a 55 percent drop in net income for the first quarter of 2009 as the chip giant's mobility group saw a big drop in operating income during the quarter.

The company's net income came in at $647 million compared with $1.4 billion for the first quarter 2008. Group revenues also fell 26 percent year-on-year to $7.1 billion for the first quarter. Unit shipments slowed and the average selling price of chips flattened out.

But it was Intel's mobility group business that saw its quarterly operating income fall to $267 million in the first quarter compared with $93 million in the first quarter 2008. The unit's net revenue fell from $3.5 billion last year to $2.9 billion in the first quarter 2009. Revenue from its Atom microprocessors and chipsets--those used in a new breed of ultra portable netbook devices--was $219 million, which represented a decrease of 27 percent sequentially.

Analysts have concluded these ultra portable netbook devices, which operators are beginning to push, will be dominated by ARM chips and microprocessors. Moreover, Qualcomm is challenging Intel on the netbook and mobile Internet device (MID) front, arguing that its Snapdragon chipset will out-compete Intel's Atom processor in the growing market segment.

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