@heimert
By that comment, you've already shown that you lack any knowledge in this area.
The XScale ARM-compatable processor is derived from the StrongARM which Intel aquired from DEC shortly before it was bought out by Compaq. (Along with several fabs in the deal) When Intel purchased it, they closed-down their existing embedded lineups. Now, why did they do that?
Same reasons I gave above. They didn't want to compete with themselves. They saw that StrongARM could be made to cater to their existing audience far easier than it would have been to cater their existing chips to StrongARM's audience. So they canned their own lineup for this newly aquired source.
Intel's only failing is with the high-end Itanium. They gambled too strongly on it succeeding x86 rapidly, so they could abandon their aged platform. But things did not work out as planned for them, and Management is not willing to admit the mistake. This could be the first step in Intel repeating the mistakes of Motorola here.