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SAN FRANCISCO--Intel's a big company, with lots of money and smart people. It will need both to take over two separate industries.

The company's official search for the next big thing is settling quite definitively on mobile computers. But this is actually two big things: not only does Intel want to create an entire new category of handheld computers called Mobile Internet Devices, it wants to set up a whole new network to service those devices.

Intel executives Dadi Perlmutter and Anand Chandrasekher laid out the company's mobile strategy Wednesday here at the Intel Developer Forum during a pair of morning speeches. For the past several years, Intel's mobile strategy has centered around notebooks, but it's eyeing more than just PCs these days.

Intel firmed up plans to ship Silverthorne, a new processor with lots of integrated features, next year. Chandrasekher showed off prototype devices built on Silverthorne that look an awful lot like the UMPCs that didn't exactly fly off the shelves: larger than a smart phone, dependent on a stylus, and many with a fixed keyboard. He also discussed a newer low-power concept called Moorestown that will consume 10 times less power than Menlow, the platform that will house Silverthorne. Silverthorne itself consumes 10 times less power than the original Banias Pentium M chip, Chandrasekher said.

Intel is lining its Silverthorne chips up against the mobile industry's ARM-based processors in anticipation of the next silicon battleground. Having tried and failed to get its chips inside mobile phones, Intel's now trying to drum up demand for MIDs as a smart phone alternative to getting the Internet in your pocket, as Chandrasekher put it. He must have bigger pockets than I do, because none of the MIDs shown onstage at IDF would fit comfortably in my pocket.

The company will get a little closer to that goal with Moorestown. Chandrasekher didn't say much about that chip, but showed off a concept device that bore a striking resemblance to an iPhone that had been stretched lengthwise. Just a coincidence, I'm sure.

But whatever Intel's partners build with its mobile chips, they'll have to somehow connect to the Internet. That's where WiMax comes in. Intel has been talking up WiMax for several years as an alternative to cellular networks and to the expense of wiring the world with high-speed cable. It's finally getting ready to start testing the waters with its mainstream products.

Next year, Intel will refresh its notebook technology with a product called Montevina. That will come with a Penryn processor, a new chipset, and an integrated Wi-Fi/WiMax radio that will come as an option as part of the Centrino brand.

It will be interesting to see how many people opt for the WiMax radio, or even whether they know they have WiMax service available. Later today I'll get a chance to check out the devices themselves, and ask more questions about Intel's strategy for MIDs and WiMax. Stay tuned.

With the next two generations of Intel's chips set in place, the company is looking forward to a low-power future.

So said Intel CEO Paul Otellini in his keynote address kicking off the Intel Developer Forum at San Francisco's Moscone Center on Tuesday. Intel will launch the server and high-end desktop versions of its Penryn generation of chips on November 12, in line with previous reports to expect those chips before the Thanksgiving holiday. And Intel has also completed the design for Nehalem, a more radical overhaul of the company's chip blueprints.

The more interesting news was Otellini's goals for Intel over the rest of the decade. The company plans to ship a generation of processors on its 45-nanometer manufacturing technology by 2009 that come with graphics integrated right onto the processor, similar to what rival Advanced Micro Devices has planned for its Fusion chips. Intel will be investing in a joint venture with KDDI, a Japanese telecom company, with plans to build a WiMax network in Japan. And as expected, Intel talked up its low-power chips for MIDs (Mobile Internet Devices), with plans to reduce the power consumption of its handheld computer chips by a factor of 10 compared with the Silverthorne processor, expected next year.

This is all part of Intel's search for growth, which has meandered a bit this decade. Still, you've got to have a strategy for the future, especially as the PC market matures over the next five to 10 years. That appears to have three legs: first of all, don't squander the base market of PC and server processors.

To accomplish that, Otellini has implemented a more gradual series of manufacturing transitions that makes sure the company doesn't try to introduce a new architecture with a new manufacturing technology, and that it doesn't go too long in between revisions to its chips. The hope is that this prevents AMD from catching it napping and losing significant chunks of market share, which is probably the best description of the years from 2002 to 2006.

Intel CEO Paul Otellini addresses hardware developers and the media to kick off the 2007 Intel Developer Forum.

(Credit: Tom Krazit/CNET News.com)

The second is graphics. AMD is forcing Intel's hand a bit in this area, with its purchase of ATI Technologies last year and the resulting plans for Fusion. Intel ships more graphics technology than anybody else on the planet, but that's only because it ships so many low-cost integrated graphics chipsets in desktops and notebooks, not because that graphics technology is extremely compelling. But the company wants to improve its performance in that area, hiring engineers and purchasing companies like Havok to improve its hardware and software expertise in graphics technology.

And in the long term, Intel will attack the graphics market by accelerating the pace at which it develops graphics technology by using its most advanced manufacturing processes. Historically, Intel's integrated graphics products used older manufacturing technology too antiquated for cutting-edge processors, but that's changing.

In 2009 Intel will ship a processor that has 45nm graphics technology built onto the chip, and in 2010 it will introduce a chip for which both the CPU and the graphics technology were designed for the 32nm manufacturing technology slated for production during that timeframe, Otellini said. And for the high end of the market, and possibly the discrete graphics market currently owned by Nvidia and ATI, Intel will produce a processor called Larrabee with many configurable cores and a shared cache memory. Otellini said Intel will demonstrate Larabee in 2008, but didn't share launch plans.

The third area of focus is mobility. Intel wants to be part of whatever design becomes the most popular mobile device. Having shed its ambitions for mobile phones, it now plans to compete directly against the smart phone industry with the MID, sort of a handheld notebook PC that hasn't really attracted much interest as of yet.

In 2008 Intel will introduce Silverthorne, and beyond that an x86 processor called Moorestown for low-power devices like MIDs. There's no evidence at all that people want MIDs right now, but Otellini thinks that if Intel continues to reduce the power consumption of its chips, the designs and software for MIDs will continue to improve.

Those devices will have to connect to the Internet somehow to compete against smart phones that use cellular networks for voice and data. And Intel thinks that network will be WiMax. The company is working with Sprint and Clearwire to get WiMax service going in the U.S., and it will hit Japan with WiMax as part of its joint venture with KDDI.

So that's what Otellini said. As always, it's interesting to note what he didn't say. He didn't mention Microsoft once during his presentation, at least that I noticed. He didn't mention Viiv or any of Intel's previous efforts to develop PCs for the living room. And Itanium seems to have finally crawled offstage, at least as far as the CEO is concerned. Keynote speeches later today from Pat Gelsinger and tomorrow from Dadi Perlmutter and Anand Chandrasekher might clear up some of those questions, but it's always interesting to see what the CEO's priorities are during one of his biggest speeches of the year.

Stay tuned for more coverage of IDF, including a talk later today with Intel co-founder Gordon Moore, and much more on the future of mobile devices tomorrow.