For Intel, small laptops bring challenge from ARM

Quick: Name an Intel rival whose name begins with an "A" and is abbreviated by three letters.

AMD? How about ARM. Even with attention focused on the immediate impact of Intel's earnings coming Tuesday afternoon, pesky questions linger about a likely future in which U.K.-based ARM and its satellite of chip and device makers pose a growing competitive threat. Maybe more so than Intel's traditional rival, Advanced Micro Devices.

Two recent statements from analysts argue that the camp of companies that make chips based on designs from ARM will dictate future competition in mobile computing. These companies include Qualcomm, Texas Instruments, Samsung, and, in the future, Apple.

New Tripoli, Penn.-based The Information Network said late last month that ARM processors, not Intel's Atom chip, will gain the largest chunk of the Netbook market in 2012--about a 55 percent market share. Netbooks are small, ultralight laptops typically priced under $400.

The market research firm argues that small ARM-based laptops, dubbed "smartbooks," will thrive under subsidized services from telephone carriers "modeled after Hewlett-Packard (cheap printer, expensive ink) and the mobile service providers (cheap cellphone, expensive monthly wireless charge)."

And on Monday EE Times cited analyst Didier Scemama, with ABN AMRO Bank NV, who said there is a "shift towards computing based on ARM-Linux and away from Intel-Microsoft over the next technology cycle," which he said would begin in the second half of 2010, because ARM processors would match Intel chips in performance and beat them on power consumption and possibly cost.

The analyst also postulated that eventually Microsoft would offer a "high-level Windows operating system" running on ARM chips and that ARM could capture 30 percent of the notebook PC processor market by 2014. He speculated, too, that ARM might be taken over by the chip companies that are its licensees.

All of this competition from ARM might be good for consumers but not necessarily for future Intel revenue streams. A report last week from DisplaySearch said that the growing market share of Netbooks has pulled down revenue in the portable PC market due to a low average selling price. Revenues for Netbooks rose to $3 billion in the second quarter of the year, jumping 264 percent over the second quarter of 2008, while traditional notebooks saw second-quarter sales fall to $23.2 billion, a 14 percent decline from the second quarter of 2008, according to DisplaySearch.

These are all just forecasts, of course, and pricier mainstream Intel-based laptops running Microsoft or Apple operating systems today account for the vast majority of the market. Moreover, other analysts argue that consumers will not necessarily flee en masse to ARM-based laptops as it will be difficult to displace a longstanding consumer preference for Intel-based machines running Windows.

[cvaldes1831]

The last sentence is the key: "it will be difficult to displace a longstanding consumer preference for Intel-based machines running Windows."

Small screen (8") netbooks running Linux were roundly rejected by the marketplace. Over 90% of netbooks shipping today run Windows.

Until people see the value of productivity suites not made by a company in Redmond, it will be a futile effort. While a few tech geeks will embrace OpenOffice, Thunderbird, etc., the mass market has a long ways to go.

[odubtaig]

Again, someone defines Linux's largest market share in any sector as is being 'roundly rejected'. That's like saying Macs have been 'roundly rejected' on the desktop which, despite the <10% market share, no-one would ever say because it's patently moronic... unless you have shares in Microsoft.

[ArtInvent]

Don't really see this as an either/or proposition. Probably most people will maintain all three of these devices because they all have their uses and prices are dropping: Full bigscreen laptop/desktop - small highly portable netbook - smartphone. All three of these devices put together can still cost less than what many people were paying for just a decent laptop a few years ago. About as many people will have two of these devices. A nice big screen for home and office, a little netbook for travel, take in the car, train. There will be some who make do with only one. Some will be able to get by with just a smartphone. Others will figure out a way to use just a netbook to make phone calls and to do all their computing tasks. Some will prefer to always have their full laptops and maybe just a cheap phone for calls.

There will also be a blurring of the lines. "Full" laptops from Dell now have super-fast boot linux systems with their own ARM chip that can stay on standby for a week - in essence most of the advantages of a netbook with full laptop always at the ready. The term 'netbook' itself is also getting blurred. Is a 12" or 13" screen a netbook or an ultraportable? Is a dual core Atom with Ion graphics and a 300GB hard drive still a 'netbook' - that's about 4x the horsepower of my old laptop I still occasionall use. And at some point not far off a 'smart phone' will have enough oomph to dock to a big screen and keyboard and act like a full PC.

Can't wait.

[jabailo]

A $99 10" inch freescale instant on linux netbook with a wimax connection is all the readwriteweb public needs.

[3tire]

are you trying to convince someone?