Intel (NASDAQ: INTC) is beginning to offer its new "Atom" chip, which is designed to work in "low-end "netbooks" and other mobile computing devices, " according to the FT.

The trouble is that it is a chip for devices that no one wants.

Intel is trying to drive a wedge between low-end laptops that weigh only a couple of pounds and new smartphones like the products from RIM (NASDAQ: RIMM) and just about every other large handset company. The new smartphones can access the internet and use WiFi hotspots instead of the cellular system, access 3G broadband wireless, and read e-mail and attachments. Cheap laptops now cost as little as $500.

Intel is up against a PC market that is growing more slowly each year, especially in large markets like North American and Europe. It has decided to launch a product in the hope the new devices will come along because the chip is available.

Unfortunately, no one wants the products that Atom would drive. The niche is already crowded.

Douglas A. McIntyre is an editor at 247wallst.com.

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• As manufacturers push to compete in the "netbook" category, Intel Corporation (NASDAQ: INTC) admitted to shortages of its Atom microprocessor. In an interview with with the Financial Times, Intel's executive vice-president, Sean Maloney, said the company had received more orders than expected for the low-power processor.

A month ago, Intel Corp. (NASDAQ: INTC), introduced a new chip category, the Atom brand, specifically designed for mobile internet devices, or what Intel it calls MIDs. After missing out on the market for cellphone chips, Intel is trying to push this technology and will use a conference in Shanghai to proclaim it as the next big thing in consumer gadgets.

According to The Wall Street Journal, Intel also said "25 hardware companies have decided to make portable Internet devices using its latest chip technology" for gadgets that are smaller than a laptop but bigger than a smartphone. Apparently, the devices will start appearing in late May and early June on store shelves in China, Japan and South Korea. N.America and Europe distribution will come at a later date.

I find it fascinating that a new category of product is being pushed from the chip level rather than from the manufacturer level. But perhaps manufacturers are bound by chip capabilities and with the Atom, specifically designed to draw little power and thus conserve battery power, it makes sense.

As PDAs seem to have all but disappeared from the market, most of us these days rely heavily on our laptops and mobile devices, separating the functions of both, especially when travelling. One is more for email, the other more for work and browsing capabilities. A device that could potentially combine both may be exactly what is needed. At a $500 price tag, when an Apple Inc. (NASDAQ: AAPL) iPhone or a Research in Motion (NASDAQ: RIMM) BlackBerry costs nearly the same, this might just find its place among those on the move.

Intel (NASDAQ: INTC) is introducing a new set of ultra-small chips [subscription required], some of them to power mini-computers that are unusually portable for consumers. According to The Wall Street Journal, "One chip, previously known by the code name Silverthorne, is designed to be the calculating engine for pocket-sized gadgets that Intel calls MIDs, for mobile Internet devices."

Contrary to Intel's hopes, the market may be a tiny opportunity. Smartphones are already taking on most of the functions that could be found on a mini-computer. They have e-mail, navigation, web access and texting capacity. Some allow for the download of documents and other data. For most effects, Research-In-Motion (NASDAQ: RIMM)'s Blackberry and high-end smartphones coming to market from a number of handset companies already serve the huge majority of the needs of people who want a portable computing device.

Intel may be entering a market that is already very crowded and has little interest in adopting its technology.

Douglas A. McIntyre is an editor at 247wallst.com.