[citation][nom]cybr[/nom]Aravind has a point... the econo-chip is now required to perform admirably for gaming. No longer are the econo-chips able to be a competitive processor unless it has video/gaming ability, for use in tablets, etc.[/citation]
Haven't you heard? tablets are replacing netbooks... [according to some analysts; obviously that's debatable] anyway, atom chips were for netbooks. These will be still be for netbooks possibly, but more likely targeting tablets... they offer less, but command a higher price, and currently the market is doing well. They support DirectX, so they can make Windows 7 tablet makers happy, Intel already provides desktop chips for Apple, they might be looking to steal some business by snagging iPad business as well, they do afterall have a working relationship with Apple these days, and if Apple is already using chips based on PowerVR, they might find it easier and cheaper to just buy all their chips from Intel... and Aravind's point about Intel not "risking" a boost in Atom's performance because it would cut into i3's marketshare doesn't seem to add up to me because:
1. i3's are much more powerful, designed for laptops and desktops, so, these chips aren't going to cut into i3 business unless (see #2)
2. Tablets start to cut into laptop business significantly, which would then passively hurt i3 sales
The only problem with that logic is, if Intel pulls it off, then they sell more Atom's which are probably cheaper to make at the expense of selling less i3's. Either way they win, which is LESS risky. If they stay away from tablets and tablets continue to boom and/or completely kill the laptop market... then Intel isn't selling i3's anyways... so, it'd be more risky for them to put all their eggs into the i3 basket...
IMO, Intel needs a short term strategic move against ARM chips. ARM chips are small & low powered, but they are quickly adding cores and speed. However, they can't compare to the general purpose logic of Intel desktop chips... but, Intel CPU's are similtaneously decreasing in size and adding cores and speed. It's only a matter of time before Intel multi-core offerings are small and low power enough to compete in tiny form factors...