It's hard to feel much concern for Intel (Nasdaq: INTC) as it battles for mobile market relevance. Sure, ARM Holdings (Nasdaq: ARMH) claims its designs are in 95% of the mobile phone market. But ARM is still tiny compared with the original chip king -- its entire 2010 revenue stream amounted to a mere tenth of Intel's R&D budget.

Intel should be poised to dominate mobile processing through sheer size and financial strength, but unless it can out-innovate its mobile-focused competitor, no amount of money will help it regain share. And ARM is working hard to keep innovating -- its newly-unveiled chip architecture could become Intel's biggest setback yet.

Splitting the work used to mean something different
While dual-core chips have been old hat for years, the typical design matches two identical wafers for improved performance. ARM's new idea is a radical departure, pairing a heavy-lifting processing powerhouse with a power-sipping chip version of a long-distance runner. The chips -- dubbed Cortex-A15 and Cortex-A7, respectively -- would pass duties back and forth as needed, saving battery power over current designs. The smaller overall chip size should also offer cost savings large enough to make smartphones the next electronic commodity. Texas Instruments (NYSE: TXN) Apple, (Nasdaq: AAPL) and Broadcom, (Nasdaq: BRCM) among other ARM licensees, will start testing the new architecture any day now, with mass use expected by 2014.

Who wins in a commoditized market?
Smartphone price plunges could be a mixed bag for Apple. The House of Jobs has dominated the mobile market's profit share to the point where it recently earned two out of every three dollars in industry profits. Can it continue to extract such high prices from its slick designs when they'll have to compete with carrier-subsidized smartphones running on ARM's Cortex pair? The Cortex-powered phones of 2014 are projected to cost under $100, lower than all but the 3GS, Apple's oldest iPhone still available.

Nokia's (NYSE: NOK) seen its profit share drop precipitously since the iPhone's release, so this new chip style ought to be right up its Finnish alley. Cheap smartphones could resurrect the company's moribund fortunes and give it a bigger foothold in megamarkets India and China, to say nothing of regaining lost share in America and Europe. With its Microsoft (Nasdaq: MSFT) partnership offering familiar functionality, Nokia could finally restore its shrinking profit stream to the raging rapids of old.

There's always a catch
Splitting a processor into two distinct roles is a brilliant take on an obvious problem -- how do you make your mobile devices last longer without sacrificing the functionality that makes them so attractive? But that innovation requires compatibility. Microsoft, Apple, and Google will need to reprogram their operating systems to accommodate the unique architecture.

That gives Intel some time to play catch-up, but the window isn't open very wide, and it won't be for very much longer. Microsoft's already built ARM support into Windows 8, and the three OS makers have every incentive to keep their users online and active as long as possible. Intel may have convinced Google to give it a chance, but the hard part is going to be getting phone manufacturers like Apple and Samsung to actually use its chips.

Intel's last, best hope at conquering the mobile space is the time between testing and wider adoption. A lot could happen between now and 2014, so add these companies to your Watchlist to stay informed of any new skirmishes in the war for the smartphone market.