> That does look like a significant shift in the company's focus.

Indeed. I'm eager to know if they plan on abandoning Power Architecture completely, and I'm inclined to believe that Mamba will stay their "fastest" (if you can even say that for 1.2 GHz) Power Architecture chip.

> I hope it doesn't backfire on them.

They're probably aware of the risk, and it seems it's not been all roses so far with X-Gene:

"As of September 30, 2011, the performance milestones and delivery schedules set forth under the merger and other agreements are not considered probable of being achieved. [...] Our arrangement with Veloce may not result in the development of any new technologies or products. Moreover, products we have recently developed and which we are currently developing may not achieve market acceptance. If these products fail to achieve market acceptance, or if we fail to timely develop new products that achieve market acceptance, our business, financial condition and operating results will be materially and adversely affected."
http://www.sec.gov/Archives/edgar/data/711065/000119312511298029/d236770d10q.htm