Intel's strategy for the peak season in the third quarter of 2010 is dampening overall notebook sales in the channel, since Intel has decided to provide system upgrades instead of price-cut promotions as in the previous years, according to market sources.

As Intel plans to launch upgraded Core i7-640M, i5-580M and i5-560M CPUs in September, sharing the same price as their predecessors, along with Core i7-680UM, i5-560UM and i7-660LM for ultra-thin notebooks; 32nm Celeron P4600 and 45nm T3500 for entry-level products; and Atom N550 for netbooks, channel vendors are starting to halt their orders and are waiting for the new models to launch, the sources noted.

In addition, weak notebook demand in both Europe and the US are also causing notebook players to take a conservative attitude, the sources added.

For the third quarter, the notebook industry is still expected to see shipment growth thanks to China's weeklong National Day holidays starting October 1, but monthly performance in the fourth quarter may start dropping as order visibility still remains cloudy, the sources noted.