How Long Can Intel Defend Against ARM?

Are any of Intel's (NAS: INTC) home turf markets safe from a potential raid from ARM Holdings (NAS: ARMH) ?

While ARM has effectively claimed the mobile-processing sector for itself with a market share exceeding 95%, Intel still has the lead in traditional areas like desktops, laptops, and servers. ARM's threat isn't exactly imminent, but it's certainly on the horizon. If Intel falls asleep at the wheel, an ARM-based tidal wave will wash out the tech giant.

ARM is now getting its feet wet in the server market with a new ARM-based offering from Hewlett-Packard (NYS: HPQ) that's in its initial testing phases. A fresh report from Taiwanese DigiTimes says that laptop makers are giving ARM some serious consideration alongside Intel. It mentions that ARM has been cooperating with Microsoft (NAS: MSFT) while Intel has been working with Google (NAS: GOOG) , which promises more choices.

ARM-based chips have always boasted low power consumption as a key selling point, while Intel chips have better performance. The two are converging on middle ground, as ARM has been working on improving performance and Intel has been trying to reduce power consumption.

It's inevitable that ARM will catch up in performance, so if Intel fails to make a dent in mobile while losing ground in notebooks, it may run into its "biggest crisis yet in 2013." Intel's director of its Ultrabook group, Greg Welch, had previously mentioned that Apple (NAS: AAPL) had threatened Intel to cut its power consumption or risk losing Cupertino's business, which was a "real wake-up call."

Evidence is mounting that ARM has a chance at tapping into laptops. Microsoft is including ARM support in Windows 8, which will run on tablets, laptops, and desktops. Rumor has it that Apple has been testing its popular MacBook Air running on the ARM-based A5 processor. Apple had also allegedly tried using Intel's low-power Atom chip in the iPad initially, before opting for ARM architecture.

NVIDIA's (NAS: NVDA) freshly launched quad-core ARM-based Tegra 3 already promises "PC-class performance levels." While the Tegra 3 is the world's first mobile quad-core CPU, it won't be the last, as chipmakers keep raising the bar with ARM-based performance.

ARM is storming Intel from all sides. Intel's offense has yet to make any dent on ARM's turf, while its defense has some holes in it that ARM is managing to get through. How much longer can Intel hold down the fort?

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At the time thisarticle was published Fool contributorEvan Niuowns shares of Apple and ARM Holdings, but he holds no other position in any company mentioned. Check out hisholdings and a short bio. The Motley Fool owns shares of Apple, Google, Microsoft, and Intel and has bought calls on Intel.Motley Fool newsletter serviceshave recommended buying shares of Apple, Google, NVIDIA, Intel, and Microsoft, writing puts in NVIDIA, and creating bull call spread positions in Intel, Apple, and Microsoft. Try any of our Foolish newsletter servicesfree for 30 days. We Fools don't all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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