Future Of Intel Versus ARM In Smartphones

People are used to seeing the ubiquitous “Intel Inside” sticker on the outside of their desktop PC. But how long will that last?

Stock shares of Intel (INTC) have plunged 10.88% over the past 12 months. But they are hardly in danger of going out of business. Intel’s biggest competitor, AMD, just laid off a bunch of its employees after posting a $157 million lost according to TechSpot.com. In comparison, Intel reported a quarterly income of $13.5 BILLION.

But quite frankly their biggest competitor in the long term is ARM. ARM is tiny compared to Intel business wise now. According to ZDNet.com the “British chip design company ARM has a near monopoly because they use less battery power and can be easily customized for each product.” They reported just $213 million in quarterly revenues.

Why is ARM such a threat? The ARM processor architecture is used by iOS, Android, and even a version of Windows 8 called “RT”. Windows 8 RT will be featured in Windows 8 smartphones and tablets like the Surface. Switching between Intel and ARM is not easy; you can’t simply switch out a processor. Switching between processor architectures like x64 and ARM requires re-compiling the operating system, drivers, and all applications. This is why Intel’s Atom chip, which is intended to compete with ARM, has not made a dent in the smartphone market.

In the future as operating systems become unified, and a single portable smart device becomes our only computer, Intel might find itself pushed out of then-merged desktop, smartphone, tablet, notebook, and smartglasses market. The good news for Intel is that they are extremely strong in the server processor department, and those unified smart devices will highly use cloud-based services–which require servers running Intel.

No one knows for certain the future of Intel, but if I were to shake my magic 8 ball I would probably see “Outlook Good”.