You mean that the "Atom I" (Silverthorne) would never work in a phone or MP3 player.
Check out "Atom II" (
Moorestown) and "Atom III" and .... Intel's in the low power race for the long haul.... Perhaps Apple's buying the rights for PA Semi to build SOCs around Atom cores. That would make a lot more sense than trying to out-engineer Intel for low power systems.
I wouldn't call it Atom I and Atom II to not confuse people, as the processing core is not really changing. Right now, Atom requires a separate supporting chipset ("Menlow Platform"). The next version of Atom is a SoC design where the supporting chipset (memory controller, I/O hub, Wifi, display controller, digicam controller, USB controller,) is integrated directly into the processor. Although this will greatly reduce both the load and idle power consumption, it's yet to be seen how well it will compete with the newest chips from ARM.
It will be going up against the ARM Cortex-A8 and Cortex-A9 SoC's, which are available in dual-core and scale up over 1.0ghz, while using hardly any more power than the current ARM11 in the iphone.
It no doubt is going to be a great battle, and consumers will be the winners no matter what. Grab some popcorn...