Intel is adapting its Atom processor to vie with that of the ARM classification, which are popularly included in iPhones and other mobile devices. Intel will begin pumping out a new, lower-powered version of the processor, branded Moorestown, in 2009 or 2010, designed especially for MIDs. Along with making the Atom more mobile-worthy, Intel is developing an open source OS, dubbed Moblin 2, to be included on its MIDs.
These upcoming MIDs are not exactly smartphones-- they'll lack certain phone-centric capabilities while incorporating more that give it the feel of a desktop system, making a sort of cross-breed between smartphone and netbook-- but are expected to take a cut out of Apple's iPhone market, not to mention Microsoft's dwindling Windows Mobile fleet. The said MIDs could be used "to play high-definition video, make Internet-powered phone calls, or download directions and local business listings on the go," though I imagine it will hold plenty of more capabilities in store so as to truly compete with Apple and Microsoft.
Microsoft casts a leery, and possibly somewhat jealous, eye at Intel's attempts to enter the mobile market. "I'm not sure there's a third category of device" in between the cell phone and the netbook, said Andy Lees, a senior vice-president in Microsoft's mobile communications area. "The thing that distinguishes a phone is it goes in your pocket or purse. If you have a six-inch screen, that's no-man's land."
Whether Intel is successful and creates a new hybrid market between smartphone and netbook is to be decided by consumers.