CES-Freescale chip targets sub-$200 netbook market

By Gabriel Madway

SAN FRANCISCO, Jan 4 (Reuters) - Freescale Semiconductor Inc is moving in on the fastest-growing segment of the PC market, announcing on Monday a new chip for netbooks that are priced below $200.

The move is the latest sign that consumers can expect to see even cheaper netbooks in the near future. Although prices vary widely, the most popular models of these small, inexpensive laptops are now priced in the $300-$400 range.

"What they're (Freescale) targeting is definitely the way netbooks are going," said Phil Solis of ABI Research.

Freescale's new ARM-based chip is from its i.MX line, which is designed for various mobile devices. The company said the chip would allow a netbook with an 8.9-inch display to receive eight hours of battery life. Freescale's reference design features the Linux-based Ubuntu operating system.

The company did not give a price for the chip, which will be showcased at the annual Consumer Electronics Show in Las Vegas this week.

Netbooks have taken the PC world by storm. Research group DisplaySearch estimates notebook shipments at 14 million in 2008, up from less than 1 million in 2007.

Currently, Intel Corp's (INTC.O) Atom processor dominates the netbook market, although competition is likely to heat up. Rival chip maker Advanced Micro Devices Inc (AMD.N) will also unveil a chip for ultra-portables at CES.

The success of netbooks has stirred fears about segment cannibalization and pinched margins for PC makers.