Longer term, Ion will challenge Intel's attempts to define the segments of the PC market to maximize its own CPU profits, said Lao. For instance, PC makers will be able to build full-sized 'value' laptops with 15-inch LCDs that run Vista for less than $400, the current price barrier, using Ion and dual-core Atom CPUs.

This lets them avoid pricier Centrino CPUs, said Lao. And it allows PC makers to sell more systems while reaping the same profit-per-PC in these tough economic times.

Intel did not respond to a request for comment. Lao expects Intel to respond to Ion by aggressively pricing bundles of its Atom CPU and integrated GPU.

"They just can't sell at or below cost and get in trouble like Samsung and Hynix," Lao said, referring to the two firms that were found guilty of dumping memory onto the market.

Nvidia's Brown noted that Intel has made public statements that it will not obstruct the sale of Atom CPUs to PC makers interested in using Ion.