Wireless-chip giant Qualcomm (NASDAQ:QCOM), in conjunction with software giant Microsoft (NASDAQ:MSFT), recently demonstrated one of its Snapdragon processors running the full version of the latter's Windows 10 operating system.

Historically, one of the major competitive advantages Intel (NASDAQ:INTC) has had in the personal-computer market is that the bulk of systems run Microsoft's Windows operating system, and many of those applications are designed to work only with Intel Architecture processors. What appears to be different this time is that Microsoft now allows Qualcomm's ARM-compatible processors to run software designed for Intel Architecture through emulation. Emulation can be quite slow, but at the very least, things should now "just work" on Qualcomm's processors. 

Qualcomm says that "the first PCs running Windows 10 based on Snapdragon processors are expected to be available as early as next year."

Although I don't expect such machines to have a significant impact on Intel's financial results next year, I do think Intel should treat Qualcomm as a serious competitor in the market for personal-computer processors. To that end, here are some things Intel needs to do to be as competitive as possible with Qualcomm and, potentially, other ARM-based processor vendors.

Image source: Intel. 

Faster architectural innovation

For ultra-low-power Core-based notebooks and convertibles, Intel launched a processor family known as Kaby Lake, branded as seventh-generation Core, in the second half of 2016. This product delivered nice performance and power benefits over Intel's prior-generation product, thanks largely thanks to a transition to an enhanced 14-nanometer+ manufacturing technology.

However, Intel made essentially no changes to the architecture aside from an updated video decoding block. The CPU cores, graphics cores, image signal processor, memory controller, and more all stayed the same.

Qualcomm delivers annual architectural enhancements to its processors across the board in addition to rapidly adopting new manufacturing technologies from the contract chip manufacturers. Intel needs to hasten the pace at which it delivers architectural innovations in its ultra-low-power Core-based processors to match the cadence that the mobile processor companies operate on. 

Tighter integration

Qualcomm's processors are significantly more integrated than Intel's Core-based notebook processors. Intel's chips feature multiple silicon dies mounted onto the same package. The first, which houses performance-sensitive elements such as the CPU, graphics, and memory controller, is manufactured in Intel's latest, most efficient technology.

The second one, which contains many key input and output technologies such as USB and SATA connectivity, is built on Intel's older, less power-efficient manufacturing technologies.

It's also worth noting that Intel's processors require standalone cellular modems if system vendors wish to offer LTE capabilities.

Qualcomm's chips, on the other hand, integrate everything -- including the cellular baseband processor -- into a single piece of silicon, which might help its products gain both efficiency and system cost advantages over Intel's solutions.

To compete with Qualcomm more effectively, Intel needs to design future low-power PC processors to become true system-on-a-chip products -- all major functionality needs to be integrated on the same piece of silicon.

Intel might be able to strike back with Cannon Lake

Late next year, Intel is expected to release its first 10-nanometer processors, called Cannon Lake, for low-power notebooks. Those processors are also believed to coexist alongside higher-performance notebook processors called Coffee Lake, which will be built on Intel's 14-nanometer technology.

If Intel can deliver a substantially increased level of integration with its low-power Cannon Lake processors, then it should be able to begin to extinguish Qualcomm as a threat in personal computers. I don't expect Intel to be able to match Qualcomm's level of integration with its Core processors overnight, but a solid start with Cannon Lake that continues with the follow-on generation, known as Ice Lake, would be most welcome.