We sit down with Intel’s Shmuel (Mooly) Eden and talk tablets, smartphones and the future of netbooks

We managed to have sit down with Intel’s corporate vice president and general manager of the PC Client Group (PCCG), Shmuel (Mooly) Eden. We had a lot of burning questions on the heels of Intel’s entry into the tablet market, and what he thought of the current state of netbooks and their future in a world where tablets are becoming more and more of a threat to a category that Intel helped create.

John: Now that Intel has Atom powered tablets running Honeycomb and MeeGo, is this now your main push? Will you be abandoning netbooks altogether?

Shmuel: No, we are not abandoning the category, we are doing two things in parallel. First of all, we’re putting a huge amount of effort to catch up and be relevant in the tablet space. It’s a fact that Apple is running the space using an ARM solution, we believe that now that we are putting more effort on the ARM architecture we will have a solution which will be compelling. In parallel we are trying to continue the work on the netbook. The netbook is changing. It’s very interesting – Asus recently launched a netbook that’s priced at $199, and that’s totally different question. We never really tested the market’s elasticity. I believed when we started the netbook was aimed only at emerging markets, but then the netbook also went to the mature markets and I believe with the new price point there will be another opportunity to see where we are.

John: There’s a lot of people that are saying that the netbook is past its prime, that the tablets will kill the netbook. Do you think there’s space for both to co-exist?

Shmuel: I believe so for one reason, but only the future may tell. If Asus comes with a netbook that’s only $199, I don’t think there’s a touch tablet that can match $199. What can you match up with a netbook that’s only $199? A tablet that costs $499? So it’s left to be seen, the market will be dynamic and we’ll be seeing many form factors – by the way, how would you call a netbook with a touchscreen? (he gestures to the Eee Pad Transformer I brought to the interview)

John: A hybrid device, I guess.

And I believe we’ll be seeing many, many more hybrid devices. Left to be seen, I believe that the category itself, of the netbook, and I believe we spoke about it in our previous financial announcements. It’s left to be seen if it’s still relevant – some say the netbook disappeared but there’s still some OEM that still have plans for it – only the future will tell. But we’ll try to support both, and we’ll see how the category will adapt.

John: Intel will also be going into the mobile space. How much catching up will you have to do, because Qualcomm is already there and Nvidia is already making its mark with its Tegra 2 processor?

Now we are jumping into the third category. It’s a fact, and I’ll not hide it – we’re behind in some categories, but then we are leading in some categories. In smartphones the fact that we’re behind is true – there are many smartphones and I’m not there. I do have great teams of architects that are working around the clock; I have a great processor technology that the competition doesn’t have, and there’s no reason to believe that I won’t be able to close the gap. We have the UMG (ultra mobile group) which are focusing 100% of their time in order to make phones that I believe you will see soon. With the tablets, you’ll see some things and we’re working to improve our tablets as well.  We’ve got all intention to be very relevant in the traditional desktop and servers and we’ll definitely be very relevant in tablets and phones, and we don’t see any reason to believe we will not to be successful over there.