Little more than a year after AMD trumped Intel in the race to a 1-GHz processor, a new chip war appears to be brewing. This time, however, the battle will be fought in the mobile trenches--and it could mean faster, less-expensive notebooks for everyone. Intel launched its 1GHz Mobile Pentium III processor last week. Before midyear, AMD plans to release its first Mobile Athlon processor (code-named Palomino) at speeds of up to 1GHz. With AMD set to challenge Intel in the lucrative mobile-processor business, competition could get fierce. "AMD will engage in a speed race," says Dean McCarron, analyst with Mercury Research. "Last year it was the Pentium III versus Athlon on the desktop, this year it's mobile," he says. Not only will the Mobile Athlon challenge the Mobile PIII's dominance in the performance notebook market, AMD's chip may very well outperform the current PIII, McCarron says. "Evidence shows it [the Athlon] will be as competitive in notebooks as it is in desktops," he says. AMD spokesperson Laureen Chernow says the company is on track for a second-quarter delivery of thousands of Mobile Athlon chips, and it expects vendor systems featuring the processor to get to market shortly thereafter. Analyst Nathan Brookwood of Insight 64 agrees that the new Mobile Athlon could challenge the PIII, but he's not convinced AMD can maintain the same level of competition in notebooks as it did in desktops last year. "AMD may not be prepared to play [processor-speed] leapfrog with Intel here," he says. For starters, AMD may have trouble keeping the power consumption and heat down to reasonable levels as it increases the chip's speed, he says. Unlike a desktop processor, which can use as much power as necessary and multiple fans for cooling, notebook processors must run efficiently to save battery life and they must dissipate heat well. The current Athlon desktop processor uses lots of power and throws off plenty of heat, which could make revving the mobile version to higher speeds troublesome, Brookwood says. Second, Intel plans to transition from its current .18-micron production process to a smaller .13-micron process in the third quarter. The new chips that result, code-named Tualatin, will use less power, create less heat, and let Intel push the chip to higher megahertz than existing PIIIs, he says. After Intel moves to the .13-micron process, AMD will be doubly hard-pressed to keep up with Intel, at least until it moves to its own .13-micron process late in the year, Brookwood says. Overall, AMD will have a tough fight, especially with Intel having won the psychological victory of reaching 1 GHz first. "Clearly Intel put a big stake in the ground," he says. That said, Brookwood says that if AMD can challenge Intel at the top end of the performance mobile market, all consumers could benefit. A speed race means processor speeds cycle up more rapidly than usual, he says. That means fast processors drive their way down the price ladder into more-affordable notebooks sooner. "That means better performance per dollar," he says. And it could mean lower prices overall. Notebook processors tend to cost more than desktop chips because notebooks are a smaller market with fewer vendors, and because Intel hasn't faced competition there - at least not on the high end (AMD has challenged in the low-end notebook segment). Tough competition at the performance end of the processor market could drive down mobile-chip prices. Lower prices, especially when spread across the performance spectrum, could lead to less-expensive notebooks. Intel executives say they aren't worried about AMD's impending launch of the Mobile Athlon. "We expect them to try to compete," says Don MacDonald, director of marketing for the Intel Mobile Group. The mobile market is too attractive to expect other companies to stay away--but Intel will deal with such competition by offering better products, he says. "When it comes to frequency, we can deliver," he says, noting the 1GHz chip launch. But the mobile market raises other important considerations, he says. It's a matter of combining fast speeds with low power consumption, something Intel has been perfecting for years, he says. "There are ten years of innovation on Intel's side," he says. Plus, the company literally has a thousand people working specifically on mobile-processor designs, building upon the work of thousands more who create the desktop processors. The company's resources simply cannot be matched, he says. Insight 64's Brookwood says that despite such obvious Intel advantages, AMD could make the mobile market more interesting. "AMD is firing on all cylinders this year with regard to challenging Intel," he says. And competition is always good for the consumer, especially in terms of performance and price, he says. "If AMD raised the stakes, Intel will respond."