Intel's Atom has been widely adopted by users and the world's largest chip maker can look at these strong results for the CPU as proof of the company moving towards the state of a big provider of such low cost microprocessors.

On Tuesday, Intel stated that the Atom chip is still hot. The company revealed that it still had difficulties in meeting demand for the product. “We did not meet demand in Q3 for the product. We are up again substantially in the fourth quarter. Our expectation is that we will meet demand by the end of the year,” said CEO Paul Otellini.

Since the Atom processors gave Intel $200 million in revenue in the third quarter, a great deal of the questions asked on Tuesday at the company's earnings conference call were focused on this specific product. “Between the microprocessor and the chipset, we did have a couple hundred million dollars of revenue from Atom in the third quarter,” said Stacy Smith, Chief Financial Officer. “We do expect that to grow rapidly in the fourth quarter.”

The company seems to enjoy this product mainly due to the fact that it’s a low-cost processor which has the capacity to yield better margins than other typical inexpensive chips like the Celeron. When talking about Atom, Intel calls this capability of the product “margin characteristics”. “What we've seen in the third quarter is a very healthy product margin,” Smith said. “On a dollar basis it's equivalent to what we see in Celeron and on a product margin percent it's higher. So if you look at it relative to our low-end mainstream stack, it's generating nice product characteristics,” Smith added.

There are some voices that question Atom's massive market penetration. There are those that fear that the wide adoption of netbooks powered by the low-cost processor may affect Intel's profits for traditional notebooks.

Intel said that it hadn't seen any significant sign that would point to this direction in the mainstream mobile processors market. “To date we haven't seen any evidence of cannibalization. And believe me we're looking. It's something we watch very carefully,” Otellini explained. “And one of the best pieces of evidence that we have is the strength in the core mobile business independent of Atom,” he added.

Even so, more and more consumers are expected to turn towards netbooks in the future due to tightened budgets. Proof of this tendency is also given by a Gartner report made public on Tuesday. According to the report, the third-quarter saw PC shipment growth courtesy of sales of sub-$500 notebooks. And netbooks do sell under $500.