Intel Begins Full Production of Oak Trail Processors

The production of tablet-specific Intel Atom processors is fully underway.

According to a report from Digitimeson Wednesday, the world's leading chip maker's much-anticipated Oak Trail platform for mobile chips combines the Atom Z670 processor and the SM35 chipset.

The report says the Oak Trail platform will go for $25 to manufacturers running the MeeGo operating system, which several industry players -- including both Intel and rival AMD -- have committed to developing. It further suggests that the version running Windows 7 will cost more than that figure, although Intel will have to keep prices relatively low to compete with British chip maker ARM Holdings, which currently dominates the tablet space.

A barrage of recent comments from ARM executives and founding members suggests looming competition between the two companies over who will power devices in the burgeoning tablet segment. Most recently, an ARM's co-founder declared that the microprocessor industry as a whole was doomed, and that Intel had the wrong business model.

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Ninety-five percent of the world’s mobile handsets and more than one-quarter of all electronic devices use an ARM chip. Facing the unfamiliar situation of trailing a competitor by a wide gap in an area of significant interest, Intel may have to initially sacrifice some of its profit margin by offering a cheaper product in exchange for increased market share.

In addition to bringing down prices, Intel is developing the Oak Trail platform to save power and add battery life for tablet products in the future. Intel says the Oak Trail processors offer a 50 percent reduction in power consumption over its traditional PC offerings, in addition to full high-definition video viewing capability.

Last month, Intel CEO Paul Otellini in a leaked internal memo acknowledged that it would take time for Intel to take over the mobile market, but expressed his commitment to that end. The company acquired Infineon Wireless Solutions for $1.4 billion in August in order to gain a foothold in the mobile space.

The development of Oak Trail was initially announced in June. The processors are expected to begin shipping early next year.