Why ARM Isn't Afraid of Intel
Considering the significance of power efficiency in mobile computing, ARM's lead in the mobile race appears secure for the time being, even though Intel has already tapped Motorola Mobility and Lenovo as OEM partners to utilize Medfield chips. At the Consumer Electronics Show (CES) this year, interviews with a few ARM execs add some context to the technological arms race.
"Roughly good enough"
ARM CEO Warren East acknowledged that his company perceives Intel "as a serious competitor," and that it was inevitable that Intel would land some design wins within smartphones. However, East doesn't think Intel can ever be the leader in power efficiency, although "they have a lot more to offer." That last bit probably refers to sheer performance, a department in which Intel has always been top dog.
East isn't particularly impressed with Intel's smartphone ambitions: "They have taken some designs that were never meant for mobile phones and they've literally wrenched those designs and put them into a power-performance space which is roughly good enough for mobile phones."
ARM's forte has always been power efficiency, and he compares the mobile revolution to your car:
People want to do more things with their phones, but battery size remains constant. It's like having a car with a fixed-size fuel tank and you want to drive 100 more miles. You've got to make the engine more efficient. That's what we do for a living.
One example is ARM's new Cortex A7 design, which has the same performance as recent chips but sip only a fifth of the juice. That focus on minimizing power consumption is partially why Apple uses ARM blueprints for its custom A4 and A5 processors, since Cupertino puts battery life pretty high on its priority list, not to mention its marketing campaigns.
WinARM at last
East is excited that Microsoft (NAS: MSFT) is opening up Windows 8 to ARM architecture, prompting ARM's slew of partners to start whipping up designs in hopes of a shift from Wintel to WinARM. One can't help wondering whether Intel feels a tad bit betrayed by its longtime partner in crime. Even though Windows 8 is expected out late this year, East has waited so long for this that another six to 12 months doesn't concern him.
He'd rather continue to sit tight and wait for Microsoft to get the experience down pat than compromise on the overall experience. ARM licensees NVIDIA (NAS: NVDA) and Qualcomm (NAS: QCOM) , among others, are also psyched about Windows 8, since their processors will have a place to call home, one that has long been occupied by Intel in PCs.
A second opinion
ARM president Simon Segars also gave The Verge an exclusive interview at CES. Segars said Intel's Medfield chip is "kind of what we were expecting," so its design wins with Motorola and Lenovo weren't surprises.
He detailed ARM's design philosophy and considers it a big advantage that ARM chips have been built from the ground up with power efficiency in mind, and they've always been packed into a single system-on-a-chip (SoC). That approach has been "deeply ingrained" into ARM's ethos; low-power has always been the starting point. ARM works to build onto performance while maintaining better power efficiency. Medfield is Intel's first true SoC offering.
On the other hand, Intel's approach has always been to start with higher-performance chips and continue to strip down performance and features to trim down power consumption. Naturally, ARM thinks its approach is easier, simpler, and better suited for mobile devices.
Separate but not equal
Segars also detailed how ARM chips are also designed to work well with other companies' intellectual property, which enables them to add features and differentiate themselves from other ARM chipmakers.
For example, some of Qualcomm's ARM-based Snapdragon chips use integrated basebands, whose additional efficiencies set it apart from other chipmakers as the only major SoC company to do this, earning the company handfuls of major design wins in the process. NVIDIA's first Tegra chip to use an integrated baseband, continuing its superhero nomenclature with codename "Grey" (as in X-Men's Jean Grey), isn't due out until later this year.
When asked about the incredible speed at which mobile CPUs have advanced from single to dual and now to quad cores, which happened in only about 18 months, Segars brought it right back to power efficiency. Adding more processing cores adds more power suckers, and finding a way to optimally balance those cores in a way that idles them efficiently and switches them off when not in use is crucial.
ARM builds this feature into its system-level architecture to support multi-core processors. For example, NVIDIA's quad-core Tegra 3 actually has five cores; it uses this fifth "Companion" for ultra-low-power tasks while tapping the four primary cores when it needs serious horsepower.
You can't be mobile without battery life
The overarching theme in both execs' comments is power efficiency. In the days of traditional PCs like power-corded desktops, raw performance trumped power efficiency. To wow today's consumers, mobile devices need to be able to go untethered for hours on end. Ever notice how one of the selling points Apple frequently touts with the iPad is its massive 10-hour battery life?
Power efficiency is also on the forefront throughout our society as we focus on weaning our reliance on fossil fuels and move toward greener ways, which has helped ARM chips start to test the waters in the important server market. Medfield's performance benchmarks topped comparable ARM chips, but it was pitted against dual-core processors as opposed to the newest quad-cores, and it missed target goals in power consumption.
Intel will keep trying, but ARM's power efficiency advantages should keep it ahead in the mobile game.
The mobile revolution is set to become The Next Trillion-Dollar Revolution. There are lots of companies that are set to cash in on it, but one in particular has excellent prospects. The company is one of few players that will help power the mobile devices of the future, and it also has exposure to the explosive growth in China. I'm so bullish on the stock that I've given it an "outperform" CAPScall. Get access to this 100% free report to find out what company I'm talking about!
At the time this article was published Fool contributor Evan Niu has sold bullish put spreads on NVIDIA and Qualcomm. He owns shares of ARM Holdings and Apple, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Qualcomm, Microsoft, Intel, and Apple. Motley Fool newsletter services have recommended buying shares of Intel, Microsoft, NVIDIA, and Apple, writing puts in NVIDIA, and creating bull call spread positions in Microsoft, Apple, and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.