ARM: Intel Business Model Not In Tune With Mobile Market
Intel is the worlds dominant chip maker, but its business model doesnt align well with the move in computing toward mobile, and that will make it difficult for the company to make significant inroads into smartphones, tablets and other devices, according to an official with ARM Holdings.
ARM-designed chips can be found in more than 90 percent of all smartphones on the market, and they also are found in most tablets, according to Jeff Chu, director of client computing at ARM. His companys businesswhere it designs the chip, and vendors like Samsung Electronics, Qualcomm, Nvidia and Texas Instruments, among others, license the designs, adds their own technologies, makes and sells the chipsallows for faster innovation and enables ARM to have a much wider reach than Intel, Chu told eWEEK in a recent interview.
As a company, [Intel is] clearly capable of building products, Chu said. However, in the mobile space, you cant say one size fits all.
Intel and ARM have been moving toward each other for several years, with Intel pushing hard to drive down the power consumption of its x86-based processors. The companys processors are found in most PCs and servers, but those chips consume too much power for use in mobile devices, where battery life is a key concern. Intel officials have been increasing the energy efficiency in its low-power Atom platform, and its beginning to pay off with the release this year of the Atom Z2460 Medfield chip, which is now making its way into smartphones from the likes of Orange, Lenovo and Lava International in India.
Intel officials expect more smartphones running their technology to hit the market this year, noting agreements with the likes of Motorola Mobility, which will release multiple Intel-based mobile devices. The giant chip maker also is predicting more than 100 tablet designs powered by its Ivy Bridge processors.
For its part, ARM and some of its partners are looking to move their energy-efficient chips into PCs and low-power servers, challenging Intel on its own turf.
But its the booming mobile space that Chu has been talking about in a recent series of interviews and demonstrations hes given this month, and one that ARM executives tend to keep a strong hold on. The computing industry is becoming more mobile, the devices more powerful and the user experience more engaging.
Computing is no longer a task, per se, Chu said. Its what we do.
That can be seen in slowing PC sales over the past few years, as consumers increasingly opt for smartphones and tablets, as well as the growth of the bring-your-own-device (BYOD) trend in businesses, Chu said. And as sales move over to the mobile space, dominated by ARM-designed chips, the OEMs will have to follow, he said.
The competition between Intel and ARM will ramp up more later this year, when Microsoft releases Windows 8 and Windows RT, the version of the operating system for ARM-based systems. Systems makers like Hewlett-Packard and Dell are expected to release tablets running Windows RT and powered by ARM chips. However, its unclear when such devices will hit the markets. Microsoft last month unveiled its own tablet, the Surface, which is powered by ARM chips.
HP and others now are expected to first come out with Intel-based tablets running Windows 8, rather than directly compete with Microsofts device. Chu and officials from Asus this month have been showing off an upcoming tabletcode-named Tablet 600which runs Windows RT and is powered by Nvidias ARM-based Tegra chip technology, demonstrating what the combination of ARM chips and Windows can do.
It also illustrates Chus contention about how ARM, with its growing number of licensing partnersARM estimates it has more than 275 such partnersis in better shape to address the rapid innovation in the mobile space than Intel.
Its also a broad market, Chu said. Smartphones, like Apples iPhone or the host of Android devices that are on the market, get most of the attention, but the mobile space also includes low-end handsets and other devices. Intel will get some traction in the market, but as it focuses on smartphones, its missing out on whole other segments of devices.
Saying Im going to get some phones is like saying Im going to go out and get some cars, Chu said.
Intel executives have said they expect to become significant players in the smartphone space over the next couple of years, and are touting the first of the Intel-based phones from Lenovo, Lava and Orange, with promises of more to come.
However, Chu said the rapidly expanding market plays more to ARMs business model than Intels. ARMs wide range of partnerships gives it a larger and more robust ecosystem that is at its core based on low power and high efficiency.
You see this huge level of new products hitting the market, he said. You cant address all of the market with one product.
However, one analyst said Intel has a key differentiator in the smartphone space. The initial Intel-based smartphones from Lenovo, Orange and Lava gives it a foothold in a growing smartphone market, but what will separate Intel from ARM is the ability to add greater security features via its acquisition of security software company McAfee.
Intel will infuse greater value in its smartphone offerings by embedding tighter security features from McAfee, which Intel acquired in 3Q10, Beau Skonieczny, an analyst with Technology Business Research, said in a research note July 17 after Intel released its second-quarter financial numbers. ARM lacks comparable security assets to match McAfees portfolio, providing Intel with a significant advantage which will help drive up margins. As a result, Intel will attract more smartphone vendors to its more profitable smartphone platform.