When couple of month ago Intel announced it would delay Larrabee introduction in 2010, many analysts thought it was the first sign for dropping the project. According to an anonymous insider, reported to be an Intel Larrabee engineer, the company has a whole product plan and roadmap still in place. While first "demos" of the system were not really astonishing, Intel seems to be still working on it and might simply decide when it wants to release it or not.
Of course, this information comes from an anonymous source, (controlled or not by Intel) and might not reflect necessarily the decision of the company. Larrabee might also not be the main priority of Intel as GPGPU while promising a lot since months (if not years) is not really there yet on the mass market. In other words, if we consider the current problems faced by NVIDIA with its first Fermi-based GPU, Intel does not really need to hurry up to release a competitive solution. In other words, when time has come then Intel will have enough engineers and resources to quickly release a GeForce killer. One should not forget also that GPGPU is associated with flexible graphics and data processing architectures and programmability, the later point being probably the key one as it would define a quick and broad adoption. Intel might want to see what type of solution would be really offered by ATI and NVIDIA (CUDA) in this field.