Advanced Micro Devices plans to combine CPUs and graphics processors and put them into everything from workstations, HDTVs, to wireless phones.

AMD said it will continue to sell to the server and desktop markets while also pursuing the growth in multi-function mobile phones and consumer electronics like gaming consoles and connected TV set-tops.

The strategy is intended to capitalise on AMD's 2006 acquisition of graphics processor maker ATI, in order to better compete with rival Intel. One analyst said it would also pit AMD against new challengers already in the mobile space.

AMD calls it the "Bulldozer and Bobcat" strategy, said Phil Hester, corporate vice president and chief technology officer for AMD. The Bulldozer line represents the server, workstation and PC market, while Bobcat, a reference to a smaller type of construction vehicle that is about the size of a fork-lift truck, represents smaller hand-held devices and consumer electronics.

AMD plans to develop these new processors on the same x86 processor architecture as its PC and server chips, Hester said. The company expects Bulldozer and Bobcat processors to hit the market sometime in 2009.

"We want to fuse the capability of AMD and ATI," said Hester. "There is a set of components available today from the converged AMD and from ATI. The fusion is trying to take those components and integrate them effectively."

AMD executives believe that there is more growth potential in smaller devices, given that many mobile phones and PDAs have video screens. In the home, gaming consoles, set-top boxes and HDTVs are all becoming Internet-connected and also deliver high-end graphics.

But AMD faces other entrenched processor makers in the portable device market, said Jim McGregor, an industry analyst with the research firm InStat. Companies such as the UK's ARM, developer of the Advanced RISC Machine processor architecture, and MIPS Technologies are currently leaders in this space.

"ARM is not standing still. They're already out there with their installed base," McGregor said. He applauded AMD, however, for focusing on the mobile space because that's where the market is going as consumers want to have Internet access on the go, but don't want to drag around a laptop all day.

AMD also provided more details on its Barcelona quad-core processor, due for release sometime this quarter. The Barcelona will come in three models, said Randy Allen, corporate vice president of AMD's server and workstation division.

AMD expects 17 percent of its Barcelona shipments to be the HE, which is designed to maximise power efficiency, with a top processor speed of 1.9Ghz. It expects 77 percent of shipments to be of its Standard model, a 2.0Ghz processor, which it says fits in the "sweet spot" between energy-efficiency and performance. Third will be the SE model, that operates at up to 2.3Ghz and will account for 6 percent of shipments.

AMD didn't provide pricing information for its quad-core chips or give a more precise date for its availability.