As you know, I have been covering the convergence device component ecosystem at quite a bit of depth, and my primary reaction to this announcement is a very mixed feeling.
I am not concerned about Intel so much, as I am concerned about Apple itself, and its ability to manage this additional level of complexity that one more layer of vertical integration brings on.
Yes, I see the advantages. A new ultra low-power, ultra-high performance processor is needed to sustain the needs of the new category of devices that will replace laptops, integrate cell-phones, but will, at the same time, be powerful miniature multi-core computers. Apple wants to own the brains of this product, and not have to share.
Very well, if all goes well. But Apple has introduced great risk in its execution abilities.
Meanwhile, Intel should go talk to HP and DELL, both of whom need competing products in this category, and better get their acts together.