It's Intel Inside - your toys

From talking stuffed animals to virtual surfboards, Silicon Valley is infiltrating the playroom with Intel announcing the first products from its relationship with toy maker Mattel.

The first two products to be unveiled, at next week's New York Toy Fair, are a computerised version of a microscope and a digital camera.

The Intel Play X3 Microscope lets kids display the items under the glass on a computer screen, and the Intel Me2Cam digital camera lets kids take video or still pictures and transfer the images into a cartoon on their PC.

Both will be available from Mattel this fall for around $99.

"In the last few years, those sorts of interactive toys have really taken off with consumers," said Cliff Annicelli, associate editor of Playthings Magazine. "And what you see in the toy industry is once one company has a hit with a certain type of toy like a Furby, a lot of other companies try to [copy that]."

The Furby -- a furry "interactive pet" that speaks its own language -- was a major hit this past Christmas. But what makes toys like the Furby so attractive to companies is that it's not just kids who like to play with them.

"Kids are growing out of traditional toys faster. Boys used to play with action figures up until say 12 years old. Now, once they get to 8 or 9, they stop playing with traditional toys and are pretty much exclusively playing with video games or computer games or things like sports," Annicelli said. "By creating more high-tech toys like Lego Mindstorm [a "robotised" version of the traditional Lego blocks that can be programmed by the consumer] you can attract older kids and adults."

And those Furbies aren't babbling to themselves in the toy chest. Microsoft jumped into the toy market a few years ago with talking stuffed animals including one based on the popular PBS dinosaur Barney. The company plans to introduce another line of interactive plush figures at the Toy Fair based on the Teletubbies, a British import that has recently become a hit with the pre-school set.