Hoping to build on the success of netbooks like Acer's AspireOne, Intel wants to prove that its Pine Trail chip package can do for desktops what the first Atom processors did for laptops.

Pine Trail is a package of chips built around Pineview, an upcoming version of the Atom processor that includes an integrated memory controller and graphics chip. By combining the memory controller and graphics with the processor, Intel was able to reduce the current Atom chip package from three chips to two -- Pineview and the Tiger Point chipset. This means the chips take up less space and consume less power than the current generation.

Intel hopes the new chips will generate more demand for Atom-based desktops, which it calls nettops.

"We're easily going to ship over 5 million nettop-based units this year, and we'll do far better than that next year," said Noury Al-Khaledy, general manager of netbooks and nettops at Intel, in an interview.

But even a big jump in nettop shipments next year means sales will still lag far behind demand for netbooks, which IDC expects will top 30 million units next year.

Whether or not nettop demand nears the level seen for netbooks over the last two years remains to be seen, and is by no means assured. The laptop market is growing at a much faster clip than that for desktops, and while Atom-based laptops may have cannibalized some laptop sales, these machines also tapped into end-user demand for inexpensive laptops that can be easily carried around -- a segment that had largely been ignored by computer makers before Atom's release.

Nevertheless, Al-Khaledy said the desktop PC market remains attractive and profitable, even as demand grows at a slower rate than laptops.

"I think that there would be a lot of companies that would kill for the 50 percent, round number, margins that we make on desktops today and the billions of dollars that it brings into the company," Al-Khaledy said. "The demise of desktops is overstated."

Intel is betting there is a sizable market for nettops and believes it can be tapped with all-in-one systems. In these types of systems the motherboard and other parts of the computer are built into the back of a flat-screen monitor, like Apple's iMac.

These types of design are made more practical because the lower power-consumption of Pine Trail means the chips generate less heat under most conditions."Our thermals are around 50 percent less than the older generation," Al-Khaledy said.

Al-Khaledy declined to disclose details of the graphics core in Pineview. That leaves open the question of what role third-party graphics, such as Nvidia's Ion, will have to play in nettops based on Pine Trail. Several vendors currently offer Atom-based nettops that include the Ion chipset.

Even though Pine Trail won't ship in volume until the end of this year, and systems won't be on sale until early 2010, one Pine Trail all-in-one PC has already turned up in China. The Pine Trail-based KND K1850 has an 18.5-inch screen, a 250GB hard disk, 2GB of RAM, according to the Shanzai gadget blog, which first reported on it.