Intel's foot-to-the-floor push into consumer electronics is still at an early stage. But already the critical expansion is showing some success, said Senior Vice President Patrick Gelsinger (pictured).

The Santa Clara, CA, chip maker has more than 700 "design engagements" alongside companies building products with its new, tiny, low-power Atom chip, Gelsinger said Tuesday.

It is a "huge opportunity for us," he said. And a necessary one. For years, Intel has hoped to broaden its business beyond chips that run computers and servers.

Its high profile charge into consumer electronics – handheld computer, phones and other ultra mobile devices – may represent its greatest chance to diversify and find new growth.

During an address at the Intel Developers Forum in San Francisco, Gelsinger said most of the design engagements represent new business for the company. Some of that business is in the medical and defense industries, he said.

Also during his address, the executive said Intel is on track to begin delivering its Nehalem processor in the fourth quarter. Nehalem is Intel's next-generation product for personal computers and servers and includes the new Core i7 brand.

He said Nehalem can run twice as fast as Intel's present server chips in some digital applications.

By Mark Boslet, Editor at large.