Intel has quietly formed a new business unit dedicated to tablets and netbooks, the New York Times reports.

It will be spearheaded by Douglas L. Davis, the current head of Intel’s embedded and communications group. Obviously, it’s meant to help the company gear up for the ever-growing tablet and netbook markets. But the real question to me is, why is Intel being so quiet  about this?

Intel already has a significant presence in the netbook market — its Atom chip is practically ubiquitous among netbooks. But with tablets, it hasn’t been so lucky. The iPad, which sparked the latest tablet craze, runs Apple’s A4 processor based on ARM technology, a rival chip-maker to Intel. ARM’s processors have helped usher in the new wave of touchscreen smartphones, so it’s not a big surprise to see the company’s technology finding success with tablets, which generally run smartphone operating systems.

Perhaps Intel feels embarrassed that it’s taken so long for it to put significant resources behind tablets. It’s not as if the company has been lazy — it’s upcoming Atom processors will allow for ultra-thin netbooks and are more than capable of powering modern tablets. But until now, Intel has lacked a group dedicated specifically to focus on tablets and netbooks, which may give off the impression that it doesn’t really consider itself a contender in those markets.

“Netbook shipments will be heading north of 100 million and we’ll all soon will find out what kind of market potential there is for tablets and these increasingly popular hybrid designs,” Intel spokesman Bill Kircos told the New York Times. “ It makes sense for us to sharpen our focus on these friends of the PC, and Doug’s experience running a similar and very successful embedded division makes him the right guy to lead the group.”

Indeed, Intel could be criticized for not looking ahead enough to predict where smartphones and tablets would go — a move which led to the company missing out completely on the smartphone CPU market.

The company has long relied on the success of Microsoft Windows to help sell computers running its processors. And while Microsoft’s cash cow OS may help sell netbooks, it’s not going to help Intel much when it comes to tablets — just look at the underwhelming HP Slate running Windows 7. But don’t count Intel out of the tablet game yet. The company is currently working on porting Google’s Android OS to its x86 architecture — which would allow Android to run on Intel Atom-powered netbooks and tablets.

Even though the new tablet market is still young, it’s clear that touchscreen mobile operating systems adapt much better to the tablet form factor than a lumbering desktop OS like Windows. (It’s worth noting that Windows Phone 7 also runs on ARM processors. If Microsoft were to pursue tablets with that platform, Intel would effectively be shut out again.)

Intel is now positioning itself to take on the likes of ARM and Qualcomm when it comes to tablet chip dominance — a fight which is due to heat up next year. Hopefully with its new business group, Intel can manage to get back into the tablet game.

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