Intel

Essentially, what all of this means is that Intel will move more features onto the "Pineview" Atom processor that are currently in the surrounding chipset. The graphics function and so-called memory controller--which connects memory with other parts of the system--will now be on the same piece of silicon as the processor.

Other functionality--the so-called I/O hub--will remain on a separate chip.

"We have a processor, we have a chipset, and we have an I/O hub. What we've done is reduce that three-chip partition to a two-chip partition," Al-Khaledy said.

The new Atom technology will launch in the second half of this year, Al-Khaledy said.

The goal of integration is to reduce power consumption and increase performance in Netbooks--which are small, inexpensive laptops designed for Web browsing, email, and less-demanding media applications.

Intel also announced the Beta version of the Moblin version 2.0 Linux operating system, which is targeted at Atom processor-based Netbooks, handhelds, Nettops (Atom-based desktops), as well as other markets such as automotive. "We're doing Moblin to unify Linux across all these segments," said Doug Fisher, general manager at Intel's software and services group.

Moblin 2.0 includes a new interface called the M-zone, which replaces the desktop and is "the entry point to the Netbook and Nettop," according to an Intel statement. This new interface is aimed at improving social networking and media--audio and video--consumption.

Intel did not disclose what PC makers may use the operating system--which will compete with Windows 7--but said Acer and Asus have used Linux in the past for Netbooks.

"We're seeing 20, 25 percent Mobilin share in Netbooks and Nettops," Al-Khaledy said. Much of the Netbook market today uses Windows XP and is expected to adopt Windows 7 when it comes out later this year.