Now Hear This!

As suggested by Apple’s PA Semi buy in April, there will be no Intel Atom use in the upcoming 3G iPhone, or any near-term iPhone, at least not for now.

That’s according to a Forbes article this week that quotes Pat Gelsinger, general manager of Intel's digital enterprise group, as saying Apple’s decision to pass on the Atom was “disappointing.”

The Atom -- Intel’s latest product family that’s being marketed on its small footprint, low-power usage, and low cost -- seemed like a good fit for the next-generation, 3G iPhone, which iSuppli has estimated will carry a meager $173 bill of materials on its starting $199 retail price. This seemingly good fit is amplified by the relationship the two companies share in the Mac computer realm. But analysts suggested at the time of the PA Semi buy that Apple was looking to control more of its devices’ design, even though the Intel-Apple relationship is recognized as solid.

While Gelsinger should be disappointed – Intel has lost iPhone opportunity, after all – don’t expect Intel to be crying over this for long. Word in the electronics supply chain is that Intel hasn’t kept up with existing demand for the Atom line as it stands now.

Meanwhile, Intel still holds its highly regarded place in the PC industry. IDC and iSuppli separately estimate PC revenue gains of 10 to 11% in 2008, and the Semiconductor Industry Association this week reminded that the PC segment continues to be a very strong opportunity for IC sales. And the PC industry isn’t growing on desktops; notebooks, an ideal fit for the Atom, are the big sellers.

Just how disappointed should Intel be on the iPhone's pass on the Atom? Share your thoughts on Apple’s decision below.

--Suzanne Deffree, Managing Editor, News