Intel has introduced a low-power microprocessor it hopes will drive a new category of computers known as mobile internet devices (Mids) and lead a renewed assault on the mobile phone market.

The world’s biggest chipmaker launched five of its new Intel Atom processors at its developer forum in Shanghai. It said manufacturers around the world were planning to ship Intel-based Mids beginning this summer.

Intel defines Mids as “internet in your pocket” devices that can be focused on functions such as navigation, communications, entertainment and productivity applications.

Anand Chandrasekher, head of Intel’s Ultra Mobility Group, described the launch as a historic day for Intel and the high-tech industry.

“We will change the way consumers will come to know and access the world wide web,” he said.

Intel recently announced the Atom brand for its smallest chip, formerly codenamed Silverthorne. It aims to challenge microprocessors based on the designs of the UK’s ARM, which specialises in chips that are economical in their use of battery power. Intel said Atom would be the world’s fastest processor under 3 watts.

It sees a $40bn market being created by 2011 for Mids, low-cost PCs, internet-enabled consumer electronics and embedded devices such as in-car systems.

A second-generation Atom chip, expected in late 2009, will be aimed at smartphones. Intel failed in its last attempt to penetrate the mobile phone market, selling its communications division to Silicon Valley neighbour Marvell in 2006.

Intel is spending 20 per cent of its research and development budget this year on expanding into new markets with Atom, as well as graphics and Wimax wireless chips.

The project with Linden Lab is one of a number of announcements being made at Thursday’s Virtual Worlds 2008 conference in New York.

There.com will unveil a partnership with the Paramount movie studio to introduce its VooZoo application to the virtual world, which has more than 1m members. Users will be able to show movie clips from Paramount’s library that represent their feelings during virtual conversations.

Separately, Intel has unveiled a second-generation version of its Classmate PC, originally designed for schoolchildren but now being offered to a wider market in the small, cheap notebook category it describes as ”netbooks”.