I think integrating MEMS is challenging but yet very interesting. Surely smart software engineers can think of many interesting applications if the MEMS sensors are really good. But why can't it be produced with MEMS-only chips and a standard protocol interfacing CPU/MCU? I think this is easier and some MEMS companies may be smarter to things right.
I agree with prabhakar_deosthali, by integrating the sensors to a software interface, Intel will be providing a platform that will allow system designers and OEMs to start solving problems with the sensors, rather than figuring out how to get them working. As these sensor become more and more prevalent, the novel usages are going amaze us.
The mere fact that Intel hired Vida Ilderem away from Motorola demonstrates that they are serious about SoC. She emphasized to me the need to integrate multiple sensors together too. I don't want to read too much into it, but perhaps Intel will be getting into the sensor market too--at least for their own SoCs.
It is good to see that the Embedded chip suppliers are now moving from the raw micro controllers from providing just some rudimentary analog and digital I/O and some rudimentary serial interfaces to such smart SOCs having ready made interfaces and data capture capabilities from MEMS sensors. If these SOCs come bundled with smart BIOS which provides ready-made callable software interfaces to the applications then the creative programmers can concentrate on developing innovative applications , rather than putting their efforts into sensor interfacing, data capture and filtering techniques. If INTEL is doing something in smart Embedded SOC then definitely it will be a smart solution!