By 2010, one billion PCs and 2.5 billion handheld devices as powerful as Pentium 4 systems will be linked in a global computing network, according to Intel's president and chief operating officer, Paul Otellini.

In his opening address to the Intel Developer Forum in San Jose, Otellini predicted that processor transistors would get even thinner, and announced that Intel was planning to build graphics capabilities directly onto the chip to reduce costs and increase performance of low-end PCs.

This would become possible as chip production moves into nanotechnology.

"By 2005 our processor transistors will be down to 65nanometres (nm), with all the benefits in reduced size and power consumption that that will bring," said Otellini.

"By 2007 we'll cut that to 45nm, then 32nm by 2009, and in 2011 we expect to be at 22nm, smaller than DNA molecules are wide."

Otellini said the combination of the network and new technologies would bring the IT industry out of recession.

"There's a collection of tipping point events going on," he added. "I believe this year we will see double-digit growth in PCs again. I think this is because we've been investing in new products that people want to buy once more."

The bulk of this growth will be in the developing world, and it is to this market that Intel is restructuring its business plan.

Otellini detailed how Intel was setting up local design teams in China, India and South America to design new breeds of PC that can service low income markets.

Europe and North America would see an increase in growth but at a slower rate, and their percentage of the total world market would shrink.