The New "ARMs" Race

Four big tech companies announced earnings after the closing bell on Thursday, with Intel (Nasdaq: INTC  ) standing out with revenue of $13.9 billion for the quarter. Intel may have enjoyed growth across every line of business in 2011, but the real challenge for the tech titan will be its battle with ARM Holdings (Nasdaq: ARMH  ) in the year ahead. 

Intel dominates the PC business, which has helped it gain traction in emerging markets. As PC's become more affordable, people in developing nations are better able to buy them -- boosting sales for companies such as Intel. While these trends should continue to drive growth for the chipmaker, Intel faces greater hurdles in its battle for control of the mobile market.   

Looking ahead
Chips for smartphones and tablets threaten Intel's hold on the computer market as the line between PC's and mobile devices blurs. Competition should really heat up for Intel later this year when chip developers running on ARM technology bring to market chips able to power Window's newest operating system on tablets and laptops. Until now, Windows predominantly has run on Intel-based processors.

In the past, Intel has lost countless mobile deals to chipmakers licensing technology from ARM. However, Intel is giving ARM something to worry about as well. After years of failed attempts, Intel will finally see its chips used in smartphones.

Motorola Mobility (NYSE: MMI  ) , along with Lenovo, has signed multi-device deals with the tech titan. The push into handheld devices puts Intel in direct competition with ARM. But to really see how this plays out for Intel, we'll have to wait until the second half of 2012, when Motorola is expected to deliver its first Intel-equipped device.   

Whether Intel can beat ARM at its own game has yet to be seen. However, it's refreshing to see Intel making meaningful steps toward growth in the mobility market. For now, ARM has a clear lead over Intel in the market for mobile computers. You can track Intel and ARM for free by adding them to My Watchlist -- The Motley Fool's free tool that brings you all the news and commentary on your favorite stocks.

•  Add Motorola Mobility Holdings to My Watchlist.

•  Add Intel to My Watchlist.

•  Add ARM Holdings to My Watchlist.

Fool contributor Tamara Rutter does not own any stocks mentioned in this column. Follow her on Twitter, where she uses the handle @TamaraRutter. The Motley Fool owns shares of Intel. Motley Fool newsletter services have recommended buying shares of Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On January 21, 2012, at 12:32 AM, jdwelch62 wrote:

    Don't forget that The Lenovo K800 will be available in China in Q2 of this year, Tamara. So while the Motorola phone won't be available in the US until H2, that's not the earliest that an Intel-powered phone will be available on the market globally. Remember that 2/3 of Intel's revenues come from outside the USA.

    Also, keep in mind that while we will eventually start seeing WinARM devices, all of the Windows-based software in the world is designed for the IA x86 architecture, & that's millions of titles. That's a huge amount of porting of all of that software over to the ARM architecture that's going to have to take place to make WinARM commercially viable, and that's going to take time & effort. In the meantime, WinTel mobile devices will be able to run vastly more software programs than any ARM, iOS or Android platforms will have access to "out of the box". So if you're a consumer faced with the choice of having all of the x86-based software that you're used to using available on a Windows 8 device powered by an Intel chip, or having to wait for there to be enough ARM-capable software to make it worthwhile to buy the WinARM option, what do you think is going to happen? So WinARM has a long way to go before the ecosystem is robust enough to support the usage needs of the users, whereas Intel has a built-in ecosystem for WinTel apps, AND let's also not forget that Android Ice Cream Sandwich has been optimized to work on IA x86 chips, so suddenly the entire Android ecosystem becomes available to Intel, too. The fact that they can build a WinARM device doesn't guarantee that anyone will want to use it, whereas an Intel-powered device running Windows 8 seems like a no-brainier, especially when the Intel device will have more power and consume as much or less battery than the ARM-powered device.

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