Intel's Atom chips to fuel Mobile Internet Devices; Who's buying?

Intel on Wednesday unveiled its Atom processors and the refrain is familiar: These chips will power a bevy of mobile Internet devices (MIDs). The larger question: What kind of future will MIDs have?

Let's face it--MID is an acronym largely cooked up by Intel to sell more chips. Now those chips released Wednesday in Shanghai at the Intel Developer Forum are pretty damn snazzy. Intel's Atom processors (statement, overview and Techmeme), formerly known as Silverthorne, an integrated architecture that lumps in graphics capability and gives these small devices (gallery right) a PC-like experience and long battery life.

The Intel Atom processor--there's an Intel Centrino Atom version also--is small fast and operates under 3 watts, compared to the 35 watt chip you'll find in a laptop.

Anand Chandrasekher, Intel senior vice president and general manager of the Ultra Mobility Group, said:

"These forthcoming MIDs, and some incredible longer-term plans our customers are sharing with us, will show how small devices can deliver a big Internet experience."

So who will buy these MIDs, UMPCs or whatever you want to call them?

There's the rub. Will MIDs replace notebook PCs? Will they compete with something like the iPhone, which frankly is used for data than voice? Is this truly a new category? How many gadgets will we carry around?

Admittedly, I look at some of these MIDs and drool. They look great. They combine the Sony PSP with the iPhone and deliver what could be a great experience. Better yet, you're tethered to the Internet.

But I'm also at the point where the laptop bag is getting crowded. What device gets voted off the island? And at what price? I found it telling that the iPhone is squeezing out the laptop for some folks. Simply put, there is a substitution effect for these new device categories.

You can almost feel the enthusiasm from Intel when it talks about its chips--designed to be the brain of these gadgets.

To wit:

The Intel Atom processor (formerly codenamed "Silverthorne") will come in speeds up to 1.86 GHz, support Enhanced Intel SpeedStep technology, and select SKUs will support Intel Hyper-Threading technology. These capabilities make it the fastest processor in the sub-3 watt space, enabling a rich user experience with fast Web page downloads and support for the latest Web technologies such as Adobe Flash and JavaScript. The Intel System Controller Hub is a ground-up, highly integrated low-power solution that features advanced low-power 3-D graphics features, hardware accelerated 720p and 1080i HD video decode capabilities, Intel High Definition Audio, and a combination of PC and handheld I/O capabilities such as PCI Express, USB Host and Client, and SDIO. Intel Centrino Atom processor technology also enables manufacturers to integrate a range of wireless connectivity options, including Wi-Fi, WiMAX and cellular data.

Sounds awesome eh? But someone has to buy these things and for Intel that means creating a new market of MIDs. My gadget lust says buy. My budget and the fact I already have more gadgets than I need says another. Are you buying?