Intel to Sell Version of Atom for Tablet Computers (Update2)

(Adds closing share price in the final paragraph.)

By Ian King

June 1 (Bloomberg) -- Intel Corp., the world’s largest chipmaker, is producing a version of its Atom processor for tablet computers, trying to head off gains by mobile-phone chipmakers.

Intel will begin supplying the chips, which use half the power of other models, in early 2011, the Santa Clara, California-based company said. The new version of Atom, the most common processor in scaled-down notebook computers, or netbooks, is called Oak Trail.

Apple Inc.’s iPad, which went on sale in April, has stoked interest in touch-screen tablet computers, a category that had declined to less than 2 percent of overall PC sales. The iPad and other similar devices announced by Hewlett-Packard Co. and Dell Inc. are based on chips more commonly found in mobile phones, using technology from ARM Holdings Plc.

“We’re very excited about the tablet segment,” Matthew Parker, a general manager of the company’s Atom division, said in a telephone interview. “We see it as an opportunity for Intel to extend its business.”

Oak Trail will support multiple operating systems including Microsoft Corp.’s Windows 7, Intel’s own Meego and Google Inc.’s Android. It will have components that let it handle high- definition video and connect with large displays.

Separately, Intel will introduce an update of Atom for netbooks that contains two processors built into one piece of silicon. So-called multiple-core chips are better at running software programs simultaneously. The company will showcase a version of the chip that has been adapted to fit into netbooks as narrow as 14 millimeters, Parker said.

Intel will give more details of the new products in speeches at the Computex show in Taipei this week.

The company’s shares fell 24 cents, or 1.1 percent, to $21.18 at 4 p.m. in Nasdaq Stock Market trading. They have gained 3.8 percent this year.

--Editors: Elizabeth Wollman, Margot Slade

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Julie Alnwick at jalnwick@bloomberg.net

original article.