Overall, Intel expects its new Atom chips to fuel an increase in the number of PC deployments per household in the more affluent urban environments worldwide and in the top-tier cities of emerging-market countries like China, said CEO Paul Otellini.

"In many households, you're going from one PC to multiple PCs with these machines," Otellini told investors in July. His view is that the new price points for the Atom -- "combined with a limited amount of features, which is required to enable the price points -- are likely to generate a new segment in the business."

Low Cache Size

This year Intel is looking for booming netbook demand to be the primary driver of Atom sales. Through the release of its Atom 330 for nettops, however, the chipmaker is clearly hoping to trail-blaze an entirely new market segment beginning in 2009.

Like their ultra-low-cost mobile netbook counterparts, nettops are expected to run the Linux operating system instead of Windows and sport a limited amount of solid-state memory instead of a hard drive. The idea is that neither of the more expensive alternatives will be required in devices dedicated to surfing the Web. The retail price of nettops based on the Atom 330 is expected to be "just under current value-desktop PC pricing," said Matthew Wilkins, a principal analyst at iSuppli.

Intel's new dual-core Atom 330 features a 1.6-GHz processing core and 1MB of Level 2 cache -- the temporary storage area where the PC stores frequently accessed data . Though the chip's cache is relatively small in comparison to Intel's processors for standard desktops and notebooks, it isn't easy to quantify the chip's limitations.

"The way cache size affects application performance is very dependent on the application itself, and to what extent it has been written to use/exploit cache memory," Wilkins said. "The simple logic here is that a smaller cache will have some type of effect on application performance compared to CPUs for regular desktops, but then again, so will a number of other differences in design between Atom and regular PC processors."

Designed for Net Access

Intel hasn't announced a dual-core Atom for netbooks. So which applications would a nettop equipped with an Atom 330 processor run better than a netbook with a single-core Atom?

"I'm not sure it comes down to specific applications being suited to either of the platforms," Wilkins said. "Its rather the user's requirement for mobility from the PC."

Otellini isn't worried about Atom cannibalizing sales of Intel's Celeron processor because Atom "is principally designed for net access, for Web access, not really to run robust applications," he said. "And I think it's likely to stay that way for quite some time."