IDG News Service — For more than a decade Arm Holdings has designed chips that have powered mobile handsets and smartphones like Apple's iPhone. The company now faces a challenger in Intel (INTC), which recently demonstrated a smartphone, LG Electronics' GW990, based on its upcoming Moorestown platform.

While Intel tries to move downstream into smaller devices, Arm is aiming at Intel's turf with products for tablets, e-book readers and low-cost laptops, which Arm partners refer to as smartbooks. Lenovo recently announced the low-cost Skylight smartbook and Hewlett-Packard (HPQ) said it is also developing one. Both will be powered by Qualcomm's (QCOM) Snapdragon processor, based on an Arm design.

But Arm faces challenges. Intel's chips go into most netbook-type laptops today. And the low-cost laptops based on Arm processors do not support Microsoft's (MSFT) ubiquitous Windows OS, which is designed for Intel's x86-type chips. However, Arm hopes devices based on Google's (GOOG) Linux-based offerings -- Android and Chrome -- will be a hit with users.

Arm CEO Warren East sat down with the IDG News Service at the International Consumer Electronics Show last week to talk about competition with Intel, compatibility with Windows and Arm's future processors.

IDG: Intel showed the first smartphone with a 5-inch screen. Are you feeling Intel's presence in the smartphone market?

East: Of course. We've been saying that the 100 percent share of applications processors in phones that we have ... can't continue. We don't really see Intel making meaningful inroads into it, not for many years, probably never. In order [for device makers] to switch architectures, the Intel product has to be significantly better to outweigh the cost of switching. We do see in a few years time Intel getting closer to parity with Arm. But that's a few years out yet before they even get closer to parity.

IDG: Arm certainly has an established market in smartphones. But Intel has a strong road map and manufacturing capabilities. How does Arm stack up?

East: People talk about Intel's road map and seem to assume that the Arm road map stands still. Well, the Arm road map doesn't stand still. We move on from Arm11 to Cortex-A8 to Cortex-A9 products. We're licensing the generation after Cortex-A9 at the moment with huge levels of performance. Moving on, we have road maps with 64-bit and virtualization.

Then you come to the semiconductor technology and people say 'Well, Intel's got some superior semiconductor technology.' Maybe they are six months ahead of the likes of TSMC, GlobalFoundries and IBM (IBM). We taped out our first 22-nanometer structures the other day. We'll have 32-nanometer microprocessors in volume in the middle of this year from some Arm partners. So there isn't a process advantage either. They are going to make some progress, inevitably, because it's a big market and people are going to want to try different things. But I can't see a way for them to make meaningful progress.

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