Intel hopes Atom software platform catches on

SAN FRANCISCO (Reuters) - Intel Corp expects netbook software written for its lower-cost Atom processor to begin hitting online stores in the first quarter of next year, helping drive chip sales, a senior executive said on Wednesday.

Intel expects the success of these software applications, or apps, to help increase sales of Atom processors, but it has no plans to make money on the apps themselves, Intel General Manager of Software and Services and Vice President Renee James said in an interview.

The world's largest chip maker is looking beyond personal computers for revenue as growth in its core business slows.

On Tuesday, the company announced it would host a software applications development platform for its Atom, which will allow developers to write programs that work across different devices and operating systems.

They will work on netbooks -- cheap, no-frills mini-laptops designed mainly to surf the Internet -- initially.

Intel itself has no plans to get into the apps store business -- drawing comparisons with the likes of Apple's successful site -- but says the apps -- which will first be targeted at Atom-based netbooks -- will be sold through others' stores.

Taiwan's Acer and Asus, and PC maker Dell Inc have all said they plan to sell the applications through their own Web stores.

"There are rev share opportunities. We haven't really pursued them. Our partners have asked us: 'are you going to do things for rev share as well, Intel?' We aren't. Right now we're saying it's not our business, we're not interested," James said.

"I'm not saying never. I'm just saying right now that's not our objective," she said.

For the time being, Intel will spend $50 to $100 million annually from its R&D budget to run the Atom Developer Program, but shy away from trying to collect any direct revenue, angling instead to grow Atom sales around a rush of applications.

That would be an iota of the chip maker's annual budget: Intel's R&D spending totaled $5.7 billion in 2008, according to a regulatory filing.

Still, executives said the apps development program is just getting off the ground.

James said Intel would wait six to eight months to look at the success of its apps platform, then consider the number of developers, applications and transactions.

She declined to give specific targets but said the quality and type of applications would play into the evaluation, and social media apps would be an important segment.

Intel will not get involved in pricing applications or parts of applications, and will use a third-party payment system, James said.

"We want the payment mechanism to be something that's widely accepted and that's managed worldwide, that kind of thing. It's not our business. Somebody does that much better than we do," she said, adding that the transaction company would be well-known.

Intel, which controls 80 percent of the chip market, has been bolstering its profile in software. The company has made 10 software acquisitions over the past two years.

(Reporting by Clare Baldwin)