Intel CEO Otellini: ARM Is Like Transmeta, Via

As Windows 8 rolls out, Intel CEO Paul Otellini points out that his company has always had competitors, and has always come out on top.

With the release of Microsoft’s Windows 8, the competition between Intel and ARM promises to escalate, particularly in the booming tablet market.

However, if Intel CEO Paul Otellini is overly concerned about ARM, he isn’t showing it. In an interview with the AllThingsD news site, Otellini compared ARM with past competitors that eventually failed to gain much traction, in particular chip makers Transmeta and Via Technologies.

“I happen to be around long enough to remember those guys,” he told AllThingsD. “People come and go, and we’ve never had an exclusive, if you will. And, overall, the best chip has won.”

Intel has long competed with smaller rival Advanced Micro Devices in processors for desktops, notebooks and servers. Transmeta a decade ago challenged Intel and AMD with a line of ultra-low power x86-compatible Crusoe chips aimed at notebooks, and was credited by some analysts for getting its larger rivals to turn their attention to power issues in their processors. However, Transmeta eventually went bankrupt after switching its focus from the hardware to its LongRun and LongRun 2 power management software.

Via makes power-efficient x86 chips, but has never gained much traction in the market.

However, the competition with ARM—whose low-power chip designs are licensed by a wide variety of vendors, including Samsung Electronics, Qualcomm and Nvidia—is of a different nature, particularly in that ARM does not use the x86 architecture. In addition, the primary battleground is not necessarily Intel’s stronghold of PCs or servers. Instead, it’s a market—mobile devices, like smartphones and tablets—that is dominated by ARM-designed chips, and one that Intel is anxious to get into.

This is particularly important to Intel, which like other tech vendors is getting hit by the slowing sales of PCs. Analysts with IDC and Gartner said PC sales in the third quarter fell 8 to 9 percent from the same period last year, due in large part to a struggling global economy and growing consumer preference for tablets and smartphones.

Intel executives believe that the combination of the company’s lower power chips—such as the newly released Atom Z2760 Clover Trail systems on a chip (SoCs)—and Windows 8, which is optimized for tablets, could help the chip maker penetrate the tablet market.

“It’s a watershed event,” Otellini said of the Oct. 26 release of Windows 8, according to AllThingsD. “The fact it spans from traditional PCs and tablets and then in all the hybrid devices in between is really very powerful. It allows the hardware side to really exercise creativity in a way that we haven’t been able to do for quite some time.”

Microsoft also is releasing a version of Windows 8 called Windows RT, which will run on ARM-based processors. However, Otellini noted that there are a number of advantages Windows 8 on x86-based tablets will have over devices running Windows RT. In particular, Intel-based tablets will be able to run all the applications and software from previous Windows versions.

“That will not be as true on the RT [machines],” he said. “I’m not sure that iTunes runs. I’m not sure that Quicken runs.”

Otellini also argued that while tablets will continue to be popular, they won’t necessarily displace PCs. He noted that many of the newer tablets coming out can also be fitted with keyboards as illustrating that users still want that PC-like experience. Otellini and other Intel executives have said that what Windows 8 will allow—with its touch capabilities—is OEMs to create a host of new system designs, including hybrids and convertibles, which can be used as both a tablet and a PC.