The term mobile Internet device may have been first coined by Intel (INTC) - Get Report, according to its chief competitor in the mobile space ARM Holdings (ARMH) . If Intel wasn't the first, the company certainly popularized the MID acronym in September's Intel Developer Forum.

Definitions of a MID vary even among manufacturers of processors such as Intel, ARM and

Via Technologies

, as well as among mobile device manufacturers. Clearly, these MIDs need to have access to the Internet and be mobile. But some definitions center on screen size, meaning that if it's larger than 8 inches diagonally, it's not a MID, it's a Netbook. No standards exist in the industry.

Simply put, MID is a marketing strategy initiated by Intel but now used universally to include the convergence of any consumer-oriented handheld devices with computing power connected to the Internet. Handheld devices commonly considered a MID are e-readers, game consoles, portable media players and GPS devices.

At the 2009 Intel Developer Forum, Intel demonstrated how serious it is about pushing its Atom-based SoC platforms into an increasing number of consumer product categories when Chief Executive Paul Otellini predicted "a future where Intel ships more SoC cores than standard PC cores." The company has more than a dozen 32nm SoCs in development using the Atom core and a common set of libraries and interconnect models, he said.

Is all that investment by Intel going to pay for itself? Just how big is the market for MID anyway? It's all in the definition. In our research for our report entitled "Intel Versus ARM in Mobile Devices and Netbooks/Smartbooks," we came across some startling analyses of the market.

We used a more-or-less industrywide definition (and again there is divergence in this definition, as I said) in which a MID as a portable device with an always-connectable Internet or area network connectivity, a maximum display of 8 inches in the diagonal dimension, and a full day's worth of battery life under typical usage scenarios. Since a smartphone fits this description, which most people agree upon (although some disagree an

Apple

(AAPL) - Get Report

iPhone is a smartphone but we will for the sake of argument call an iPhone a smartphone), the entire MID market is nearly -- guess what -- smartphones.

I

wrote

on

TheStreet.com

on Aug. 10, that in my analysis, Intel loses money on each Atom it makes. It is moving Atom SOC production to the Taiwan foundry

Taiwan Semiconductor

(TSMC)

in an effort to save (read: make) money on the Atom. The Atom SoC design puts the graphics processor and memory controller on the same die as the processor core, so the selling price will probably be in the $45 range instead of the $29 Atom CPU. Assume Intel makes a profit of $10 on each SoC. That would give it profit of $77.5 million in 2010 or $19.4 million per quarter for the non-smartphone MIDs, assuming Intel has a 100% market share.

In the second quarter, Intel reported a profit of $1.6 billion. The additional $19.4 million profit would represent just 1.2% of the company's profits.

ARM has a lock on the smartphone market, and now

MIPS Technologies

(MIPS)

is entering that market with its RISC-based processor (ARM is also RISC based). It will be difficult for Intel to make an impact in smartphones even if its 32nm Medfield SOC went into

Nokia's

(NOK) - Get Report

smartphone.

My

recent article

on

TheStreet.com

noted that ARM would gain 55% of the netbook/smartbook market in 2012, the other sector where Atom competes with ARM processors. Intel is facing a formidable foe in ARM.

Intel is flush with cash, and business in the enterprise and desktop sectors is not moving as fast as its policy of introducing new processors. Intel does a great job in the PC CPU market with its plethora of chips and platforms, but they aren't the best for all CPU applications, particularly MIDs.

Intel continues to spend money outside the U.S. It is spending at least $2.5 billion on a new fab in China, built a fab in Singapore with

Micron Technology

(MU) - Get Report

, and spend another $3.5 billion to build a fab in Israel a few years ago. And of course it is paying TSMC in Taiwan to make the Atom cores. Better it should acquire new and different technology by buying a company rather than making a sheer frontal attack on ARM that will only give it minimal share in the MID market.

Robert N. Castellano, Ph.D, is President of The Information Network, a leading consulting and market-research firm for the semiconductor, LCD, HDD and solar industries. Castellano is internationally recognized as one of the leading experts in these areas. He has nearly 25 years of expertise as an industry analyst. Castellano has provided insight on emerging technologies to many business and technical publications, including Business 2.0, BusinessWeek, The Economist, Forbes, Investor's Business Daily, Los Angeles Times Magazine, The New York Times, USA Today and The Wall Street Journal. He is a frequent speaker at conferences and corporate events. He has over 10 years' experience in the field of wafer fabrication at AT&T Bell Laboratories and Stanford University before founding The Information Network in 1985. He has been editor of the peer-reviewed Journal of Active and Passive Electronic Devices since 1985. He is author of the book "Technology Trends in VLSI Manufacturing," published by Gordon and Breach. His book "Solar Cell Processing" was published in 2009 by Old City Publishing. He received his Ph.D. in solid state chemistry from Oxford University.