Is Intel's Atom Small Enough Yet?

If Intel (Nasdaq: INTC  ) wants to play any significant part in the mobile computing revolution that's going on all around us today, the chip giant had better get serious about the Atom line of mobile processors. This week's Atom update is a small step in the right direction, but is it enough?

The mobile computing space is divided into two major growth markets at the moment: smartphones and netbooks. Intel's Atom products are popular in netbooks, while ARM Holdings (Nasdaq: ARMH  ) and a plethora of ARM licensees like Texas Instruments (NYSE: TXN  ) , Samsung, and Qualcomm (Nasdaq: QCOM  ) completely dominate the smartphone market. Even if you include handheld media players like the Apple (Nasdaq: AAPL  ) iPod or Microsoft (Nasdaq: MSFT  ) Zune in the market description, I still couldn't name a single product with Intel Inside.

The ARM architecture is moving into the netbook space, but the Atom isn't likely to return fire anytime soon. ARM's main advantage is in low power consumption, which is critical when the product is used to power small devices where a large, heavy battery would be downright ugly.

The new Atoms push power draws down to the 7-watt range, or about one-tenth the electric juice a Core 2 desktop chip would eat. Like I said, that's not a bad result. However, some ARM-based chips draw less than 0.5 W under full load and measure their idle power draw in tens of milliwatts.

So I suppose Intel is happy to battle for supremacy in the netbook space when it comes to mobile computing. The latest, skinniest processors Intel can produce still don't look anywhere near svelte enough to run a decent phone. And Advanced Micro Devices (NYSE: AMD  ) has enough on its hands fighting Intel in the desktop, laptop, and server markets from the eternal underdog position. Don't expect AMD to power your next phone. ARM has an absolute stranglehold on the burgeoning smartphone sector.

Do you think Intel will ever become a true competitor in the smartphone market? Short of buying ARM, I doubt it -- but the comments box below is dying to hear what you think.

Fool contributor Anders Bylund owns shares in AMD, but he holds no other position in any of the companies discussed here. Apple is a Motley Fool Stock Advisor pick. Intel and Microsoft are Motley Fool Inside Value recommendations. Motley Fool Options has recommended calls on Intel and a diagonal call strategy on Microsoft. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.


Read/Post Comments (10) | Recommend This Article (8)

Comments from our Foolish Readers

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  • Report this Comment On December 22, 2009, at 5:07 PM, djangophile wrote:

    That's a tough fight - because ARM barely makes money. Although they license over a billion processors a year, Arm Holdings (ARMH) only makes about $60M profit. (What's that, about 17 cents on each one?) Of course all the licensee's make money selling the chips, the TIs and such.

    Intel could license ARM and be in that market too, but they wouldn't be getting those famously high Intel margins.

  • Report this Comment On December 22, 2009, at 5:19 PM, roguesisland wrote:

    In a nutshell, one tick to a tock. Intel will take one step at a time. The author does nothing but expose his anti-Intel bias, similar to all the anti-Microsoft diatribe spewed by so-called journalists on the internet.

    Besides, Intel will buy ARM if it wants to, same for Nvidia.

    touché.

  • Report this Comment On December 22, 2009, at 5:36 PM, gfbjohn wrote:

    At a low .5W consumption at full tilt, ARM's processors are a prime choice for gizmo companies to run in multiple processor configurations to ramp up computing power. The ploy sure worked for Google, IBM and other companies running tens, hundreds or thousands of CPUs to do miraculous things.

  • Report this Comment On December 22, 2009, at 5:38 PM, gfbjohn wrote:

    At a low .5W consumption at full tilt, ARM's processors are a prime choice for gizmo companies to run in multiple processor configurations to ramp up computing power. The ploy sure worked for Google, IBM and other companies running tens, hundreds or thousands of CPUs to do miraculous things.

  • Report this Comment On December 22, 2009, at 5:57 PM, theBigDog2009 wrote:

    Intel can/could go any to any market and eventually dominate. They have the talent, the money and the process.

    However, Intel is used to making a large profit on its products. Entering other markets requires Intel to observe the price points.

  • Report this Comment On December 22, 2009, at 6:26 PM, Scunnerous wrote:

    Well, while Intel goes tick-tock-tick-tock, it's only a matter of time before we get the inevitable "doink". The one thing which always hurts Intel is its innate hubris: DRDRAM, NetBust being prime examples of recent years ago. Intel's game is, and always has been, "proprietarize" the architecture and hardware infrastructure and they haven't succeeded even in the PC space yet. Itanic was the spectacular failure there - AMD64 was a huge embarrassment to them. Have people already forgotten how Larrabee was supposed to be spanking nVidia and ATI in GPUs by about now?

    The real question here is whether ARM can scale up into the laptop market - there are already people with sample product who think so. There are customers who will buy Atom netbooks because they need binary compatibility with x86... mostly business users but in the consumer space, ARM has the hardware solution and the correct approach which appeals to the SoC mfrs & system builders.

    Atom in a phone? xScale was the perfect illustration that Intel does not understand or know how to tackle that market.

  • Report this Comment On December 22, 2009, at 6:31 PM, Scunnerous wrote:

    Well, while Intel goes tick-tock-tick-tock, it's only a matter of time before we get the inevitable "doink". The one thing which always hurts Intel is its innate hubris: DRDRAM, NetBust being prime examples of recent years ago. Intel's game is, and always has been, "proprietarize" the architecture and hardware infrastructure and they haven't succeeded even in the PC space yet. Itanic was the spectacular failure there - AMD64 was a huge embarrassment to them. Have people already forgotten how Larrabee was supposed to be spanking nVidia and ATI in GPUs by about now?

    The real question here is whether ARM can scale up into the laptop market - there are already people with sample product who think so. There are customers who will buy Atom netbooks because they need binary compatibility with x86... mostly business users but in the consumer space, ARM has the hardware solution and the correct approach which appeals to the SoC mfrs & system builders.

    Atom in a phone? xScale was the perfect illustration that Intel does not understand or know how to tackle that market.

  • Report this Comment On December 23, 2009, at 1:30 AM, ibankingcrooks wrote:

    djangophile: Intel did license ARM - it was called XScale and they sold it to Marvell in 2006.

    Intel does not like to be in a business they don't on all the intellectual property.

    I agree with the other posters and the article, its unlikely Intel will make it in the smartphone industry soon, if ever. This is not about Intel versus ARM. ARM's revenue is not very relevant. As long as other chip manufacturers keep making great SoC designs from ARM architecture, they will provide more value add, more SoC options, and hence lower end-device manufacturer costs. I can't see why ANY smartphone manuf would be interested in an Intel chip. Intel would need to create dozens of different Atom designs, with different aux components, many of which they have no expertise in, and market this. The power that Intel could wield in PCs does not exist in cellphones: industry standard architecture. And Intel could never by ARM - they would be crushed in an anti-trust investigation. Intel investors - face the fact - your invested in a big elephant - it just cant grow much more. sorry.

  • Report this Comment On December 23, 2009, at 4:42 PM, DaveRensberger wrote:

    I've always thought that the "Atom is going to dethrone ARM" argument was ridiculous. Even if Intel could get Atom to provide similar MIPS/watt, designers of embedded devices like smartphones would still have absolutely no incentive to move away from ARM. Binary compatibility is of no importance to a smartphone design! People in silicon valley understand this, while people on Wall St. evidently don't. Oh well... this gave me the opportunity to buy ARMH for $3.80/share, so I won't complain!

  • Report this Comment On December 24, 2009, at 9:36 PM, captainccs wrote:

    Yawn...

    Computer chips was last century's story.

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