Windows 8 to Fuel ARM Surge vs. Intel, AMD in PC Market: IHS iSuppli

The stranglehold that Intel and its x86 chip architecture have had on the PC market for three decades will come to an end starting next year, when Microsoft's upcoming Windows 8 will open the door to systems running on processors designed by ARM Holdings, according to research firm IHS iSuppli.

In a report July 18, IHS iSuppli analysts said that by 2015, 22.9 percent of notebook shipments worldwide will be ARM-based systems, a jump from the 3 percent projected in 2012. Shipments of ARM notebooks will reach 74 million units in 2015, compared with 7.6 million in 2012.

Fueling the rapid growth will be the next iteration of Microsoft's Windows operating system. Microsoft officials announced at the 2011 Consumer Electronics Show in January that Windows 8, due out in 2012, will support SoC (system-on-a-chip) architectures, in particular those designed by ARM and manufactured by the likes of Nvidia, Qualcomm, Texas Instruments and Samsung. Windows support is crucial to ARM officials, who have been looking to expand into the PC space but have been slowed by a lack of software support.

For decades, Windows has supported only x86 chips from Intel and AMD.

"Starting in 1981, when IBM first created its original PC based on Intel's 8088 microprocessor, the X86 architecture has dominated the PC market," Matthew Wilkins, principal analyst of compute platforms for IHS iSuppli, said in a statement. "Over the next generation, billions of PCs were shipped based on x86 microprocessors supplied by Intel and assorted rivals—mainly Advanced Micro Devices. However, the days of the x86's unchallenged domination are coming to an end as Windows 8 opens the door for the use of the ARM processor, which already has achieved enormous popularity in the mobile phone and tablet worlds."

The biggest inroads for ARM will be in what the analysts are calling "value notebooks"—such as netbooks—where price/performance is a key metric. Such systems come in at less than $700, according to IHS iSuppli. Currently, such systems run Intel's Atom and Celeron M chips, or Advanced Micro Devices' E-Series processors.

ARM-designed processors dominate the mobile-device market, thanks to their low power consumption and small dimensions. Such characteristics will make ARM chips attractive to PC OEMs, particularly in the value notebook space, according to Wilkins.

"ARM is well-suited for value notebooks, where performance isn't a key criterion for buyers," he said. "Value notebook buyers are looking for basic systems that balance an affordable price with reasonable performance. ARM processors deliver acceptable performance at a very low cost, along with unrivaled power efficiency."

ARM officials haven't been shy about their ambitions. During the Computex 2011 show in May, ARM President Tudor Brown told journalists that the company expects that by 2015, half of all mobile PCs—including tablets and mini-PCs—will be powered by ARM-based chips.

Some PC OEMs, including Acer, Asus, Samsung and Toshiba, reportedly are getting ready to release ARM-based notebooks running Google's Android operating system by the end of 2011.

For their part, Intel officials are pushing a concept they're calling "ultrabooks"—very thin and light notebooks powered by Intel Core and Atom chips and running at less than $1,000. Intel executives are predicting that ultrabooks will account for 40 percent of notebooks shipped by the end of 2012. A number of systems makers, including Hewlett-Packard, Acer, Asus and Lenovo, reportedly are building ultrabooks.

The PC market is one of several in which Intel—and to lesser extent AMD—will compete. Both Intel and AMD have been working to drive down power consumption in their processors while retaining the high performance they've been noted for. Intel executives in particular have been vocal in their desire to grow their reach beyond their traditional server and PC businesses and into such areas as smartphones and tablets.

Intel not only is expanding the capabilities of its Atom platform, but also is continuing to evolve its Core processors, all with an eye toward the mobile-device market. In May, Intel unveiled its Tri-Gate transistor architecture, which officials said will drive up the performance of the chips by 37 percent while cutting power consumption in half. The Tri-Gate design will first appear in Intel's "Ivy Bridge" processors, initially in PCs and servers and later in such devices as smartphones and tablets.

In addition, Intel will use the technology and the Atom chips to help stave off a challenge by ARM and some of its manufacturing partners—such as Marvell Technologies and Nvidia—in the low-power server space.