Intel originally came out with their Atom CPU and thought it would be used in Netbooks in the 10″ or smaller models. But now some OEMs are going to use the midget processor in their new 12″ models. Both Dell and Samsung have plans for new 12″ Netbooks which should be released soon.

So why is Intel unhappy about this situation? Intel depends on profit from their higher priced dual-core processors to keep their revenue flow in high gear. By using the less expensive Atom processors, Intel sees a drop in revenues. Over at AMD they opted out of the pint sized laptop market and left it to Intel to fill the void. Now the world’s largest CPU maker is having second thoughts about OEMs using the Atom processors in a marketplace that was previously served by the dual-cores.

In a recent article from TechCrunch it states that:

Intel also wants to keep Netbooks at 10 inches or less. Some PC companies we’ve spoken with say that Intel doesn’t want Atom chips in devices bigger than 10 inches, and puts incredible pressure on them to keep Netbooks at 10 inches or less. Dell’s Inspiron uses an Atom chip anyway, but Samsung is using Via’s competitive (and less expensive) chip, the nano.

We asked Intel if they forbid manufacturers to build Netbooks with larger than 10 inch screens, which is what those manufacturers are telling us (Dell notwithstanding). Their answer: “Intel defines a netbook as a 10″ or smaller screen size. We recommend that OEMs and netbook manufacturers use that guideline as well in order to get the best user experience.”

That’s a nice statement but it’s complete rubbish. There is no performance loss with a 12 inch screen v. a smaller screen (other than power usage). A 12 inch Netbook is just as fast or as slow as a 10 inch one. The only difference is that the user is even less likely to buy a low end laptop with a dual core.

So while Intel may be unhappy about the situation, consumers will reap the benefits of larger Netbooks which will be using the battery frugal Atom processor.

Comments welcome.