For all of its success, one thing Intel could never master was the standalone graphics card, eventually ceding the market to Nvidia and ATI/AMD. That was supposed to change with the company's Larrabee project, which was designed to produce 3D graphics chips that could compete with the GeForces and Radeons of the world.
Somewhere along the way last year, however, Intel realized that it wasn't near ready to start producing Larrabee hardware, and scaled back expectations, saying that the project would now serve as a software-based development platform instead. But CEO Paul Otellini recently suggested that the concept of Larrabee-based hardware isn't dead after all, and said the confusion came from some people in Intel disclosing details about the project earlier than they should have. He told investors that Larrabee was taken off the firm's roadmap essentially to give it more breathing room over the next few years.
It seems clear that Intel has backed off on its previous hints that Larrabee could eventually compete with Nvidia and ATI consumer products in terms of gaming performance, and Otellini emphasized Larrabee's potential for general-purpose computing tasks. This jibes with ATI and Nvidia's efforts to promote the GPGPU technique of its latest boards using the Stream and CUDA platforms, respectively.
There's always the chance a far-off Larrabee chip could wind up in a future videogame console (it was rumored to be in a next-generation Nintendo console and the eventual PlayStation 4), but it looks like the competition between ATI and Nvidia for PC graphics supremacy will remain a two-horse race for the short term.