Intel expects Atom desktops for $199

Budget, basic desktops powered by Diamondville CPUs may cost between $199 and $250, Intel says.

Taking advantage of dropping hardware prices, Intel expects to plug its newest Atom chips into desktops that will be available later this year from under US$200.

Intel expects an Atom chip, code-named Diamondville, to be used in fanless desktop computers designed for basic tasks like surfing the Internet or viewing standard-definition DVDs. The company expects the systems to be priced in the $199 to $250 range.

The Atom chips do not have the processing power required for more intense computing tasks like viewing high-definition DVDs, said Noury Al-Khaledy, general manager of Intel's Atom desktops, which the company called "Nettops." An Atom desktop could serve as a second machine in developed countries or a primary desktop in developing countries, he said.

The Nettops will run either Windows Vista Starter, Windows XP or Linux, Intel said. PC makers will decide which OS they use and set the exact pricing.

Intel has made it clear it wants to push Linux with the Nettop platform, said Roger Kay, president of Endpoint Technologies Associates. The Nettops are being conceived more as an appliance, and Windows Vista Starter is not designed for that type of machine. In addition, Windows Vista Starter will only be offered in developing countries.

The low-cost desktops are part of Intel's plan to push Atom chips into new product categories, which also include low-cost notebooks and "ultramobile" devices. The company is putting single-core Diamondville chips in notebooks priced between $250 to $300 and Silverthorne chips in ultramobile PCs, which Intel calls mobile Internet devices (MIDs).

Nettops may carry a dual-core version of Diamondville, which Intel is developing. Diamondville is based on Silverthorne, which has a small size and is designed for ultramobile devices.

The chip for Nettops has been designed from the ground up for low-cost desktops, Al-Khaledy said. It is not a modified version of Intel's Celeron and Core 2 Duo chips, which are capable of handling more intense computing tasks, he said.

Atom desktops may appeal to users in developing countries looking to buy their first computer, Kay said. They may also appeal to price-sensitive buyers, but not to people who need more computing power such as gamers and office workers, he said. Atom desktops also may not be as successful as MIDs, Kay said.

"Intel's throwing a lot of mud up against the wall, and some of it may stick, and some of it may not. Nettop seems like one of the more likely to fall off," Kay said.