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HOUSTON, Nov 30, 2011 (BUSINESS WIRE) -- --Integration with Cognos Business Intelligence enables business leaders to easily automate reports ...
A looming clash between Intel and Qualcomm will take center stage at the Consumer Electronics Show next week in Las Vegas, with both chipmakers seeking to control the future of mobile devices.
Qualcomm Chief Executive Officer Paul Jacobs will demonstrate notebook computers based on his company's chips on next Tuesday, highlighting a push into an area dominated by Intel. Later that day, Intel CEO Paul Otellini will take the same stage to announce phones featuring the Santa Clara company's chips, renewing a decade-long push to get into a market that Qualcomm controls.
The popularity of smart phones and tablets has put the companies on a collision course. The market for mobile phone chips will grow 40 percent to $29.9 billion by 2015, according to the Linley Group. With more consumers using handheld devices as their primary access to the Internet, Intel can't afford to stay only in the realm of personal computers, said Jim McGregor, chief technology strategist for research firm In-Stat.
"For Intel, it's a 'we have to be there,' " he said. "Never bet against a computing device that fits in your pocket. I do more on my smart phone than any other device."
For years, Intel processors failed to win orders in the mobile phone market, mostly because they were too energy-hungry to work in a device that people expect to last days between charges. San Diego's Qualcomm and other mobile phone chipmakers, meanwhile, haven't had much impact on Intel's dominance of laptops because their products can't run most computer software.
The success of Apple's iPad, which runs smart-phone chips based on ARM Holdings designs, proved that phone processors could deliver enough performance for computing tasks. Microsoft, the top software maker, also is putting pressure on Intel to adapt. After years of working exclusively with Intel's x86 technology, a partnership known as Wintel, Microsoft's Windows 8 operating system will also support ARM chips.
ARM licenses
Qualcomm and other developers of smart-phone components license their technology from ARM, an English company that doesn't make its own chips. The change to Windows will give those manufacturers a new opening into the PC industry.
"Now we have the world's largest software company saying they're committed to this kind of platform for their flagship operating system," Rob Chandhok, a senior vice president at Qualcomm, said in an interview.
PCs shifting to ARM chips could cost Intel $2.2 billion in sales by 2015, according to Daniel Amir, an analyst at Lazard Capital Markets in San Francisco.
Consumers expect their laptop computers to behave the same as their phones, Qualcomm's Chandhok said. That means they turn on instantly and are always connected to the Internet. Because Qualcomm designed its chips for that kind of use, they have an advantage, he said.
Intel says the reverse is true. Smart phones are becoming more like personal computers, giving an edge to Intel's technology, said spokesman Bill Calder.
"We believe we have an opportunity to play there, and we've been working hard on multiple fronts to make that a reality," Calder said.
Intel's experience with previous versions of Windows and its ability to support existing software will make systems that use its chips more attractive, particularly for companies that need a secure environment, he said. That's because existing security software may not be compatible with computers based on non-Intel chips.
Its role as the world's largest chipmaker, with the most advanced production factories, also will help Intel develop high-performance chips that use less battery power, Calder said.
Jen-Hsun Huang, CEO of Nvidia, which is expanding into ARM-based processors for mobile devices, says it won't matter if Intel can produce more efficient chips.
Too many electronics and software companies have shifted their efforts to ARM and other mobile technology, in part because Intel's dominance of PCs made it hard to compete in that market, he said.
"The amount of innovation around ARM has reached critical mass," Huang said. "If you're a cell phone maker or even a car company, you would absolutely choose ARM."
No easy way
Neither side will have an easy time pushing into the other's turf, said In-Stat's McGregor.
"It's going to be as difficult for ARM to get into computing devices as it is for x86 to get into mobile devices," he said.
McGregor expects Windows 8 devices to use Intel's chips at first, rather than ARM versions. While Intel could get its processors into new smart phones, those deals probably won't translate into significant orders in 2012, he said.
Qualcomm's Chandhok said that even though there have been more test systems for Windows 8 produced on Intel chips, his company will be providing ARM-based versions. Microsoft plans to begin selling both versions of the operating system at the same time, he said. (Catherine Brooker, a spokeswoman for Microsoft, says the company hasn't shared details about when the software will be released.)
This article appeared on page D - 1 of the San Francisco Chronicle