* Business more predictable in current quarter
* Not sure when downturn will bottom
* Bullish on sales of netbooks using Atom chip
(Adds Nvidia comment)
By Janet Kornblum
SAN FRANCISCO, Feb 25 Intel Corp (INTC.O) is
seeing some predictability return to the chip business this
quarter but it is still unclear when the downturn will hit
bottom, Chief Executive Paul Otellini said on Wednesday.
Otellini's comments at a conference followed a forecast by
research firm Gartner that global semiconductor revenue would
drop 24 percent to $194.5 billion this year as consumer demand
dries up for gadgets like digital cameras and computers.
Despite the recession, Otellini said he remained bullish
about sales of netbooks -- the small, low-cost laptop computers
used mainly for e-mail, word processing and websurfing. Most
netbooks use Intel's Atom chip.
"You're starting to see a pattern of purchases emerge again
that's more predictable," Otellini said at the Goldman Sachs
Technology and Internet Conference in San Francisco.
"I'm not saying we know where the bottom is or that we've
hit bottom (but) the predictability is starting to come back
into the system," he said.
"I think you have seen the global shock and now people are
starting to figure out how to work out of it," he added.
Earlier on Wednesday, Cisco Systems Inc (CSCO.O) Chief
Executive John Chambers told the conference he expected
business conditions to begin recovering around the end of
Calling netbooks the "only bright spot of growth in the PC
industry," Otellini said he expected growing sales, especially
during the recession.
Chipsets used in netbooks, which generally cost between
$300 and $400, provide a better margin than chipsets Intel
sells for low-end notebooks, he said.
"Not only will it appeal to people in emerging markets as
first-time machines, it will also offer an alternative to
somebody that wouldn't have bought a higher-end laptop even in
mature markets," he said of netbooks.
Otellini was also enthusiastic about mobile Internet
devices or MIDs, new gadgets that also use Atom chips.
Announcements would likely be made "in the next month or
so" from handset manufacturers building new devices using
Intel's chips, he said.
Otellini also addressed Intel's legal battle with graphics
chipmaker Nvidia Corp (NVDA.O).
Last week, Intel alleged in court that a four-year-old
chipset license agreement between Nvidia and Intel did not
extend to its next-generation microprocessors.
Nvidia, which makes chipsets that work with Intel's
microprocessors under the license, had disputed that, saying
its license was valid. [ID:nN18427253]
Otellini called the graphics chipmaker's argument an
attempt to "defend the status quo."
"If defending the status quo is honoring our four-year-old
contract, then yes, that's correct." responded Nvidia spokesman
Shares of Intel rose 2.4 percent to $13.03 on Nasdaq.
(Additional reporting by Anupreeta Das; Editing by Bernard
Orr, Ted Kerr and Marguerita Choy)