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NVIDIA has unveiled a new netbook platform that combines an NVIDIA GeForce 9400M GPU with an Intel Atom CPU to dramatically boost graphics performance on low power machines like netbooks and nettops. We first heard that NVIDIA was working on something like this a week and a half ago, and now the company says machines built around the platform could be ready to ship in the first half of 2009.

The NVIDIA ION platform will replace the integrated Intel GMA 950 graphics chip used on today’s Intel Atom processors with the NVIDIA GPU, which could boost performance as much as 1000%. That will go a long way toward making netbooks work better as tiny gaming rigs. It will also support all the visual eye candy that comes with Windows Vista and Windows 7. And NVIDIA says the GeForce 9400M chip won’t drain your battery any faster than the Intel GMA 950 integrated graphics.

But the NVIDIA chips will cost a bit more than the current generation Atom processors, which means ION-based netbooks could cost around $50 more than machines with Intel Atom N270 processors. While $50 might not seem like a much, it’s a lot of money when you’re talking about a $400 computer. While I certainly hope that we see ION powered netbooks hit the shelves as soon as possible, I also hope that manufacturers who adopt the platform offer customers a choice between a machine with an ION chipset and one with a cheaper Atom-only chipset.

Laptop Magazine has a Q&A with NVIDIA Product Manager Dave Ragones, who explains that the ION platform could be used in larger machines as well as netbooks. In other words, the lines between netbooks and notebooks are continuing to blur, which is something that laptop makers like Dell, HP, and Lenovo can’t be happy about. Right now there’s some concern that mini-laptop sales might be eating into the sales of larger laptops. But since netbooks tend to have slower processors, less GPU power, and lower resolution displays, they’re no replacement for a full sized laptop for most people. But will that change when you can play Call of Duty 4 at 30 frames per second on a netbook?