Is This Intel Win The Beginning Of The End For ARM Holdings?

Published in Company Comment on 1 May 2012

Intel sets its foot firmly in ARM's turf.

A version of this article originally appeared on our US site, Fool.com.

"Better late than never" definitely applies to Intel (NASDAQ: INTC.US) in the mobile processing space. ARM Holdings (LSE: ARM) and its legion of licensees have been able to reap the rewards, as the Chip King has missed the boat -- until now.

On last week's earnings conference call, Intel CEO Paul Otellini specifically noted that the company would be seeing an important milestone within a matter of days, as the world's first Intel Medfield Atom-powered smartphone would be launching as a bold step into ARM territory.

As expected, the device turned out to be the Lava Xolo X900.

anImage

Source: Xolo.in.

Here are the device's basic tech specs.

Processor1.6 GHz single-core Intel Atom
Operating SystemGoogle (NASDAQ: GOOG.US) Android
Display4.03-inch at 1,024 x 600 resolution
CamerasRear: 8-megapixel. Front: 1.3-megapixel.
Onboard storage16 GB

The X900 also has all the other requisite features of any modern smartphone, like an accelerometer, gyroscope and capacitive touchscreen, among others.

Who in the world is Lava?

Never heard of Lava? That's not surprising, because Lava is a small Indian gadget maker playing in the, um, Indian market. It's an interesting development that the OEM responsible for arguably one of the most important Intel-powered product launches in recent times is a relative no-name, especially compared with some of Intel's other mobile OEM partners, like Motorola Mobility (NYSE: MMI.US) and Lenovo, both of which should have Atom-powered devices out by year's end.

In all likelihood, Intel launched first with Lava as a relatively safer test bed. That way, if something went horribly wrong, it would be a safe environment for it to stumble in compared with the important domestic market.

I would say that the Medfield Atom is strategically more important than Chipzilla's new Ivy Bridge processors that just launched, since Ivy Bridge is a continuation of Intel's famous tick-tock model (with some major technological advances), while Medfield represents the company's big push into one of the largest growth markets that it's missed thus far.

Is there an app for that?

When it comes to app compatibility, Intel is using a process called binary translation to ensure that apps work on its x86-based Atom. Not all apps will be compatible, though, as some apps will still work only on ARM architecture.

Intel estimates that roughly 90% of apps out of Google's rebranded Google Play storefront will work just fine.

Anandtech recently got its hands on one of these handsets and subsequently put the device through its standard glut of rigorous tests. When it comes to app availability and compatibility, Anandtech found that the software performed admirably. There were a couple of minor hiccups, but the average Android user isn't likely to be able to tell the difference.

Stacking up

The device stood up well in the CPU benchmark tests compared with other popular devices. HTC's new One S and One X, both part of the Taiwanese OEM's new unified rebranding approach, stood up the best against the X900. Notably, what fared the best were the international versions of those devices, which carry NVIDIA's (NASDAQ: NVDA.US) quad-core ARM-based Tegra 3, while the domestic versions carry Qualcomm Snapdragons for their integrated LTE baseband support.

That's a good sign for Intel in terms of performance and apps.

The ARM advantage

One of the reasons ARM hasn't been afraid of Intel is that ARM chips have always had advantages in power efficiency and consumption, which are of paramount importance in mobile devices where battery life is an important consideration.

The X900 isn't taking home any medals in this department, but it's on par with other Android devices like Samsung's Galaxy S II or Galaxy Nexus. So while the Atom isn't better than ARM chips on power efficiency (no one really expected this), it's certainly competitive.

Scared?

While I recently sold my ARM shares over concerns of ARM's monetisation and valuation, I still think the ARM ecosystem has advantages in momentum and a wider array of choices from numerous chipmakers. Intel is proving that it can be a viable alternative, though, with a competitive offering, so the ARMy should definitely be concerned.

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Comments

The opinions expressed here are those of the individual writers and are not representative of The Motley Fool. If you spot any comments that are unsuitable hit the flag to alert our moderators.

gezmondo 01 May 2012 , 1:02pm

Yet again another Intel/Arm article , but no mention of ImaginationTechnologies (img) who provide the graphics IP to Intel..

AJHome 01 May 2012 , 1:25pm

Whilst the comments about company valuation might be valid, there seems to be this idea that ARM supplies devices only as an alternative to Intel PC processors. In fact ARM cores are found in far more applications than this; TVs, car electronics, smart meters, and many more.

"Is This Intel Win The Beginning Of The End For ARM Holdings?". In short, no.

davidhell 01 May 2012 , 8:08pm

1. That a new device which is still to be tested in an open market is suddenly going to displace ARM is obviously fanciful.

2. If it is “nearly” as good as ARM devices in speed, memory usage and app coverage, why will it displace ARM chips?

3. Intel’s deep pockets are not all that useful against ARM’s near ten year advantage of partnerships, technology and market testing, and their proven track record of delivery. It’s less about what Intel has, or is prepared to invest; more about what other companies have already invested to bring their ARM based devices to major markets in commercial volumes knowing that they will work - and sell well.

What’s the timescale for Intel to displace arm? Is it in any way as long and as difficult as Microsoft’s efforts to get Windows based phones to take over the world? Intel would stand a better chance if they invested in flying pigs instead. But it would probably require too much power to make it comercial…

mcturra2000 01 May 2012 , 8:46pm

"One of the reasons ARM hasn't been afraid of Intel is that ARM chips have always had advantages in power efficiency and consumption"

I was reading just the other day about a fund manager who said ARM could displace Intel due to their chip designs. That's a brave call, considering that Intel are likely to fight back. IQE (a British company) are developing Gallium Arsenide chips that are suitable in smartphones. They have published joint papers with Intel. So it's way too early to predict that ARM will win the smartphone wars. It's only over when it's over.

IQE have been off their peak since March 2012, but they've been increasing production capacity recently, which looks like a bullish sign to me.

Badgerd 01 May 2012 , 11:10pm

Please remember, folks, ARM doesn't make chips!
Anyone can buy a licence and use ARM designs in their own product, adding value in the process.

Is that market going to dry up any time soon? Even if Intel makes and sells comparable chips? Discuss.

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