When Intel (NASDAQ:INTC) first unveiled the specifications of its low-cost integrated applications processor and baseband chips, formerly codenamed SoFIA (which stands for "Smart or Feature Phone on Intel Architecture"), an interesting thing about those chips is that they come integrated with graphics technology supplied by semiconductor IP giant ARM Holdings (NASDAQ:ARMH).

It would seem, though, that the use of ARM graphics in this product line is temporary as Intel is apparently planning to use in-house graphics architectures in future SoFIA chips.

Here's how we know
Intel recently put up a job listing on its website calling for a "GPU Verification Engineer." Here is a screenshot of the listing:

Sofia Inhouse

Data source: Intel.

The relevant portion is in the first line of the second paragraph, in which it is made clear that Intel is working on developing in-house graphics technology for integration into future SoFIA mobile processors.

What does this mean for Intel?
For Intel, there seem to be a number of implications. The first is that Intel believes that its future graphics IP will at the very least be competitive with third-party graphics processor designs in terms of performance, power, and area.

A more optimistic view would be that Intel thinks that it can deliver more optimized solutions than what it expects the third party graphics vendors to be able to deliver, potentially giving its products a competitive advantage over chips from rivals using third-party graphics designs.

Intel should also benefit from being able to leverage the software and driver work that it does for its high-end phone/tablet chips (which are set to use Intel's own graphics architectures going forward) in its lower-cost and likely higher-volume SoFIA products.

Finally, by moving to its own architecture, Intel should save on IP licensing fees, which should provide a modest improvement to product gross profit margins, assuming that Intel's solution delivers at least as good performance-per-area as competing solutions. (If Intel's graphics IP requires greater silicon real estate to achieve a given level of performance, then this could potentially cancel out the cost savings associated with not having to pay a licensing fee.)

What does this mean for ARM/Imagination Tech?
To the extent that Intel and/or its partners such as Rockchip and Spreadtrum gain share in the mobile chip market, this should represent a long-term loss to both ARM Holdings and Imagination Technologies (NASDAQOTH:IGNMF), which has provided mobile graphics intellectual property to Intel in the past.

This isn't likely to have an immediate impact on the financial results on either of the GPU IP vendors, as it's unclear when Intel will begin to transition its SoFIA product line from graphics provided by external IP vendors to its own technology.

Furthermore, it's also not clear how much share Intel, either with its own system-on-chip products or with those co-developed with partners such as Spreadtrum and Rockchip, will ultimately gain with these products.

Foolish final thoughts
At the end of the day, Intel has been investing heavily in making its graphics architectures more powerful and power efficient. Such investments pay off in making its PC processors better, and it would seem that the company also plans to leverage those investments to help differentiate its smartphone and tablet processor offerings.

Whether Intel succeeds in providing such differentiation remains to be seen, though, as its track record in the mobile processor market to date is not one that inspires confidence.

Ashraf Eassa owns shares of Intel. The Motley Fool recommends 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.