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Intel Loses Mobile to Arm; Is PC Market Next?

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Windows 8 will run on both Intel- and ARM-powered machines. The decades-old 'Wintel' marriage is over.

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The way we use computers has changed. The growing popularity of tablets shows that battery life and portability are just as important as speed and performance. This does not bode well for Intel (INTC). Recent moves at both Apple (AAPL) and Microsoft (MSFT) are pointing toward Intel's waning supremacy in the chip market.

Last year, Microsoft announced that the long-awaited Windows 8 touch-enabled operating system will run on ARM (ARMH) processors as well as Intel x86/64 chips, ending decades of mutual exclusivity dubbed "Wintel."

The relationship between Microsoft and ARM was initially thought to be exclusive to the Windows mobile platform. Windows on Arm (WOA) for full-blown PCs will include lightweight, low-powered versions of Word, Excel, PowerPoint, and One Note. Last week, Microsoft CFO Peter Klein suggested that older Windows applications could be rewritten to run properly on the WOA systems.

ARM, which Apple helped establish through a joint venture in the 1980s, makes chips that are tailor-made for the mobile age. The main advantage of ARM Core processors is that they are smaller and more power-efficient. Intel chips are undisputedly more powerful, but they are more expensive, larger, and more power-hungry. This is why the iPhone, iPad, and myriad Android (GOOG) devices use these chips.

The lower power usage enables the new operating system to re-imagine a lot of what we take for granted in a PC, and make them more like iPads. According to Microsoft engineer, Stephen Sinofsky, WOA computers won't even need to be turned off.

In more bad news for Intel, Apple is even rumored to be looking to equip future iterations of the Macbook or the lightweight Macbook Air with ARM chips. CEO Tim Cook didn't rule out the possibility in a recent interview for the Wall Street Journal.

Not every user is going to need a high-performance chip, and this is clearly where the growth is. Tablets sales are growing fast and even cutting into PC sales. These buyers are telling the giants of tech that portability and power-saving is just as important as speed. ARM makes the chip for the devices that are selling. With this foray into desktops and laptop PCs, ARM might extend its dominance over tablets. If Intel wants to compete in the future PC market, it will have to make PC chips more like the tablet chips.

Twitter: @vincent_trivett
No positions in stocks mentioned.
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