Intel Preparing Oak Trail Processors For Tablets

Intel is developing the Oak Trail microprocessor for the booming tablet market. The chip reportedly features a 50 percent reduction in power consumption over Intel's traditional PC offerings, in addition to full high definition video viewing capability.

Oak Trail was initially announced in June and is scheduled to begin shipping early 2011. In a report released Tuesday, market research firm iSuppli predicts exceptional growth in the tablet market over the next two years relative to that of traditional PCs, and this market transition is driving Intel's shift in strategy.

According to iSuppli, traditional notebook PC sales will grow 12.5 percent this year and 11.3 percent next year, and tablet sales will grow 197.7 percent next year and 57.4 percent in 2012

While Intel makes 80 percent of the chips inside PCs worldwide, it has yet to break into the mobile market. Intel's purchase of Infineon's Wireless Unit in August was an indication not only of its interest in tablets, but its attention to Apple's success, since Infineon's chips power the iPhone.

"Intel is smart," said Matt Wilkins, principal analyst for compute platforms at iSuppli, in a statement. "The company knows perfectly well that the media tablet market is being defined right now. And if the company doesn’t become a player immediately, its prospects of getting into the market in the future will only grow dimmer."

Next: Platforms That Will Run Oak Trail

The Oak Trail system-on-a-chip solution will compete with Apple's ARM-based A4 microprocessor featured inside the iPad, which sold 4.2 million units in the third quarter according to Apple. Despite Apple's significant head start, Oak Trail will have the advantage of operating on three different platforms: Google's Android, Microsoft Windows 7 from Microsoft and the MeeGo OS from Nokia -- although Apple CEO Steve Jobs said during Monday's earnings call that such an open ecosystem would lead to fragmentation.

Along with Apple's iPad and Samsung's Galaxy tablet, a number of OEMs including Toshiba, Dell and HP are expected to offer tablets next year.

Intel said during its own earnings call last week that revenue from the Atom processor was down 4 percent sequentially in Q3, although CEO Paul Otelini said tablet cannibalization was not a major factor in the drop-off of Atom sales. However, in an internal e-mail leaked the following day, Otellini made Intel's grand ambitions in the tablet market clear.