Didn't we discover a few months ago that Intel was ARM's largest customer? They use ARM in some of the Intel SSD's.
ARM11? From Wikipedia.
" The initial ARM11 core (ARM1136) was released to licensees in late 2002."
Wow, cutting edge ARM technology! To me this is like when you find Styrofoam in the bumper of a Mercedes and try imply that the rest of the car is made of consumer packaging materials.
Another thing to consider is the way that Intel does accounting. When they say that they make money at each phase of the process they mean it. If they were to use Atom processors they would have to pay for their own license internally. This ARM license is something they've paid for years ago, and it's dirt cheap to pay royalties that it just makes sense to use it.
In very simplistic terms this is like when you have to make a couple batches of chocolate chip cookies. You can pay $10 for the a couple boxes of ready mix or $4 for buying the contents yourself and making them. Before you can go to the supermarket someone finds a couple boxes of mix purchased but not used last Christmas. It's spent money and the contents are still good, what would you do?
Had it been a Cortex A9 ARM processor, yeah that would be different.