Freescale on Monday is expected to announce a new processor for netbooks that may challenge chip maker Intel on price in the low-cost computing space.

The company's i.MX515 processor will run on netbooks, low-cost laptops that are designed to perform basic computing functions like accessing the Internet and running productivity applications.

Intel dominates the netbook space with its Atom processors, which are found in netbooks priced around $299. Freescale hopes to drive costs down even further by putting its processors in $199 netbooks. Netbooks have gained in popularity since Intel started shipping Atom last year, and Freescale wants a piece of the pie as shipments continue to grow.

Freescale will demonstrate an i.MX515-powered netbook with Wi-Fi wireless networking made by Pegatron, a spinoff of Asus, at the Consumer Electronics Show in Las Vegas between Jan. 8-11. It wasn't immediately clear whether Pegatron would distribute netbooks with the Freescale processors.

In addition to lowering prices, Freescale hopes to improve battery life over Intel's Atom chips, said Glen Burchers, marketing director at Freescale's consumer division. Netbooks with Freescale processors will be able to run for around eight hours, according to the company. That level of performance would top the battery life of Atom-based netbooks.

The processor requires less power to run and doesn't need a heat sink or fan to cool as it is designed from a core used in communication devices like cell phones, Burchers said. The i.MX515 processor is based on the Cortex-A8 core from Arm, which can scale in performance up to 1GHz. It supports 3D graphics and can playback high-definition video.

Freescale hopes its processors will catch on with audiences like teenagers, who access the Internet intermittently for Web browsing and social networking.

"We believe the netbook is a device that is going to be primarily targeted at Internet access, that is a companion device to computers and to smartphones. It is not a replacement for either," Burchers said. Options to connect to the Internet, like Wi-Fi wireless networking, will be included in Freescale-based netbooks.

The chips will ship by the middle of this year, Burchers said. Some companies are considering using it in netbooks, though Burchers didn't provide any names. The netbooks could include screen sizes from 8.9 to 10 inches, and could reach buyers by the end of the year, he said.

The IDG News Service is a Network World affiliate.