would be a interesting way to jump onto the android bandwagon. I can see several interesting approaches that can spawn from this.
If AMD was thinking of picking up some ARM licence and wanted to pump out products like Nvidia, this might be a way for them to perfect the graphic portion, and to get a better understanding about the scope of development needed to cross over.
They might not want to cross over, but instead want to licence out the graphic architecture to be paired up with ARM cores by a third party? I remember seeing this on a slide a while back, and proving at least in part that AMD can make a compatible video card might be another approach.
Last idea... they just want to make a really cheap product, that has the capability to deliver a rich environment... I have no idea how this would work... but its not a stretch. they are making a nice package for the mobile market with there APU, and I can see people coding for 3D acceleration more in the developing Droid market, then the already matured Desktop/Laptop world. In which case, I could see this as there strategy to compete against Intell's superior CPU architecture.
If this is a sing that AMD might move away from x86 for at least a small portion of there production line, I would be a happy camper.If there sharing the same CPU architecture, but go into a war on the graphic side, we can only benefit especially since its not only green and red in this frontier.