"This product will absolutely be the fastest mobile graphics chip available in the year 2000," said Bill Henry, director of mobile component marketing for ATI. He said that internal testing shows the Rage Mobility 128 is some 60 percent faster than competing products in 3-D applications, and 20 percent faster for 2-D applications. "This means that a mobile user can get the same performance as a desktop user, with no compromises," Henry said.

The heart of the product is the same core already being used for ATI's Rage 128 Pro device for desktop PCs. The mobile version is sampling now and will ship by January, just a few months after the desktop device began volume shipments.

"There is a very strong demand now for high-performance chips in the mobile graphics market," said Dean McCarron, principal analyst for Mercury Research (Scottsdale, Ariz.). ATI only entered that market last year, and has since risen to the No. 2 spot with some 20 percent of the market share, behind notebook graphics industry leader NeoMagic Corp. That growth came largely on the strength of its previous Rage Mobility devices, which were also based on the same core as ATI's earlier Rage desktop chips.

McCarron noted that ATI's recycling strategy allows it to deliver high-margin products with minimal additional R&D expenses, and at the same time gives it a direct path to the sweet spot of the mobile PC market.

"Everything in the mobile market lags behind the desktop market," McCarron said. "Eventually that means notebook consumers will be looking for low-cost systems, but right now they are looking for performance."

ATI plans to sell the chip in the mid-$40 range, which is well above the $21 average for graphics chips today, and several times higher than the $11 average seen in the desktop market for graphics chips. The total market for notebook graphics parts will reach about $22.5 million this year, according to Mercury.