It is starting to look as if Intel's dream of protecting its notebook market from netbooks is going to fall flat on its face. Intel has resisted moves to make netbooks bigger and more useful but now it is starting to look as if it is failing. AMD, VIA and ARM seem to be targeting Intel's prize jewels and the world on the street is that they might just get away with it.

Arvind Chandrasekhar, general manager for business development at the India unit of AMD said that the idea of a seperate “netbook” is something that was a bit silly anyway. Flogging a half price notebook is something it can do and it makes sense. He said that there is a need for thin and light notebooks, but we are not sure whether they need to be put in a category called netbooks.

Intel of course wants to limit the use of netbooks to computers of a certain size. That way a bigger screen means a more expensive chip. Intel will lose shedloads if big netbooks takes off. A netbook traditionally comes with a $40 Atom chip while a regular one will have $200 chips. AMD's Congo already has four manufacturers signed up to use it in bigger than average netbooks. Our bet is that Intel will have its clock cleaned if it does not allow its chips to be used in big netbooks.

However Intel is in a damned if we do, damned if we don't position. The only thing it has on its side is that Microsoft is also not keen on big netbooks either. Big netbooks still require a cut down version of Windows 7. Redmond has agreed with Intel that it will only allow full versions of Windows 7 to appear in large screen netbooks. This alliance could stop things going AMD's way, but it is also possible that other things can be done to prevent it having too much impact.

Microsoft is likely to be more flexible than Intel if AMD can prove that it is a good idea to release a “netbook version” of Windows 7 for, example.