--ARM CEO expects licensees to capture about 10% to 20% of notebook PC market by 2014 or 2015
--CEO thinks Intel's smartphone market share will be limited
--CEO says pricing for ARM-based chips in PCs will be comparable to smartphone chip pricing
By Shara Tibken
Of DOW JONES NEWSWIRES
NEW YORK (Dow Jones)--The chief executive of ARM Holdings PLC (ARMH, ARM.LN) expects companies making chips based on its technology to capture a bigger percentage of the notebook PC market than rival Intel Corp. (INTC) will take in smartphones.
The two companies have been trying to expand in each other's markets, with ARM licensees making a push into computers and servers and Intel focusing on smartphones and tablets. ARM processors, used in virtually all mobile devices, have typically had an energy consumption advantage over Intel chips, while Intel's semiconductors, used in the majority of PCs, have traditionally been more powerful.
Warren East, in an interview Thursday with Dow Jones, said he expects companies making ARM-based chips to capture about 10% to 20% of the notebook PC market by 2014 or 2015. Conversely, he expects Intel to control about 5% to 10% of the smartphone market within a few years.
East called Intel's first smartphone on the market, the XOLO X900, a "perfectly adequate smartphone," but said there are about 20 other chip suppliers also targeting the highly competitive market. That will make it difficult for any one company to dominate the industry like what has happened in traditional computing.
"It's going to be quite hard for Intel to be much more than just one of several players," East said. "But they'll be a perfectly credible player."
Intel hasn't provided its estimates for phone market share, but Chief Executive Paul Otellini said in a recent interview that the company expects to have a significant presence in the smartphone market and be a major player in mobile in a few years. He also said he expects the industry to consolidate, with only about two to three mainstream mobile chip providers ultimately existing.
Intel spokesman Jon Carvill on Thursday declined to comment further about market share projections.
ARM doesn't build chips itself but designs processor technology that it licenses to companies such as Qualcomm Inc. (QCOM) and Nvidia Corp. (NVDA). Such power-efficient processors are used in nearly all mobile devices, including those from Apple Inc. (AAPL). But Intel believes it has just about reached power-consumption parity with ARM-based chips, and the first smartphone using its Atom processor recently was released in India.
Intel competes with Advanced Micro Devices Inc. (AMD) in supplying processors to computers and servers, but the two will face competition from ARM-based suppliers later this year when Microsoft Corp. (MSFT) releases its newest version of Windows. One flavor of the operating system, dubbed Windows RT, is the first to be compatible with ARM chips.
East said Windows RT won't have all the functionality of Windows 8, which runs on x86 chips from Intel and AMD, because older applications won't work on the ARM-compatible operating system. He noted ARM-based chip makers won't be addressing or targeting all PC use cases.
"If you look at a lot of consumer PCs, people just want to run an Internet browser, an email package, some Office applications and Adobe [Systems Inc.'s (ADBE)] Photoshop or something like that, and not much else," he said. "Therefore, we can put ARM processors into the heart of PCs to target a lot of the use requirements."
East said the ARM-based chips used in PCs will be significantly cheaper than PC chips from Intel, something that will make them attractive to the computer manufacturers. Typically, smartphone chips cost about $20, he said, compared to the approximate $80 to $200 pricing for Intel's Core line of PC processors. The ARM-based chips in PCs will likely command a slight premium to the smartphone processors, East said.
"It's not as if anyone will pay a lot more money to put an ARM processor in a PC versus in a smartphone," he said. "But selling a chip for $25 instead of $20 is a massive, massive improvement in profitability for the smartphone chip provider."
While Intel's PC chips are more expensive, its Atom line--targeted at mobile devices and low-end PCs--are priced more in line with ARM chips.
Intel's Carvill said Intel expects to be "very price competitive with the ARM licensees" with its Atom chip in consumer devices such as smartphones, tablets and PCs that convert between a tablet and a notebook.
He added that for Windows, Intel chips also bring "tremendous capabilities and expertise in performance, compatibility and power efficiency that will differentiate platforms running Intel architecture from new entrants to the market."
ARM shares trading in New York recently slid 3% to $22.34, down 19% in the year-to-date. Intel, meanwhile, slipped a fraction to $26.39. Its shares are up 8.9% in 2012.
-By Shara Tibken, Dow Jones Newswires; 212-416-2189; shara.tibken@dowjones.com |
