With Intel looking to expand its reach beyond its core PC and server businesses, officials at the giant chip maker are becoming less concerned about competition from traditional rival Advanced Micro Devices.
Instead, they're focusing more on ARM Holdings, whose chip designs are found in large numbers of mobile handheld devices-including smartphones-a business that Intel wants in on. Texas Instruments, Qualcomm and Nvidia are among the chip makers that use ARM designs.
With the release May 4 of its new "Moorestown" Atom-based platform, some analysts say Intel is making a strong argument for its x86-based technology in such devices as smartphones and tablets, if not in 2010 then by next year.
In a report released May 3, Morgan Stanley analysts said that while many other industry observers believe Intel will have a difficult time overcoming power consumption issues to really challenge ARM in the smartphone business, they believe that with the 45-nanometer Moorestown and the following 32-nm "Medfield" platform-due in 2011-that Intel will make inroads into the market.
"Our analysis indicates that Intel is focusing on the right design attributes, increasing its probability of success in penetrating the smartphone application processor market," the Morgan Stanley analysts said. "We think Intel's Moorestown progress will trigger the process for model updates to include smartphones."
During the launch May 4, Intel officials noted that the Moorestown platform-which includes the Atom Z6 series SoC (system on a chip), Intel Platform Controller Hub MP20 and a dedicated mixed signal IC-offers a 50 percent reduction in idle power consumption, 10 hours of standby battery time, and 5 hours of active battery life.
The SoC is created by combining 3D graphics, video encode and decode, memory, and display controllers with the Atom chip, according to Intel.
However, the Morgan Stanley analysts said that smartphones will continue evolving away from basic phone and voice tasks to more computerlike functions, such as graphics, video, audio and Internet capabilities. Processors for these devices increasingly will be judged on those functions.
"Consequently, our view is that the basis of competition will shift increasingly toward ability to handle compute functions-an area of strength for Intel," they said. "Our checks indicate that Moorestown is set to outshine competitive offerings on computational, graphics, video and Web page load benchmarks."
Daniel Amir, an analyst with Lazard Capital Markets, also said that Moorestown is impressive technology, but questions Intel's changes against the ARM-designed processors on the market.
"With a 50x reduction in power consumption, increased performance and reduced footprint, [Intel] is making its 2nd attempt to overtake the handheld market with Moorestown," Amir said in a report May 5. "While we are still skeptical of [Intel's] ability to overcome growing competition from ARM-based designs, we were impressed by Moorestown's performance leadership in terms of video (1080p HD) playback, Java and webpage load times compared to existing solutions in the market, and we are less concerned about pricing."
Intel's success in this space will rely more on the ecosystems that grow up around it than solely in the platform's performance capabilities, he said.
The Morgan Stanley analysts agreed, pointing to Intel's partnership with Nokia in development of the Linux-based MeeGo mobile software platform, "which we think positions Intel well against competition, which appears to lack similar focus on software."
Intel has created its Atom developer program to help drive the development of software around its mobile chip platform.
The mobile space is a volatile one as Intel and ARM continue to push for market share, and analysts are not in agreement on how it will pan out. In January, ABI Research predicted that by 2013, ARM-based mobile PC systems-netbooks, smartbooks and other ultra-mobile devices-will outsell x86-based systems. This year will probably see a 75-25 split in Intel's favor, the ABI analysts said, but that will change over the next three years.
ABI's prediction echoes that of Robert Castellano, an analyst with The Information Network, who said in March 2009 that netbooks powered by ARM's Cortex-A9 and running Linux will overtake x86-based ultra-mobile systems by 2012.
In October 2009, ARM announced its Cortex-A5 MPCore chip design, which officials said will be cheaper, faster and more energy-efficient than its predecessors and will be aimed at Internet-enabled devices, including netbooks and smartphones.
However, also last year, IDC forecasted that non-x86-based systems wouldn't gain more than 10 to 20 percent of the market, in part due to Intel's influence with systems makers.