Despite a slow entry into the market, Intel's mobile chips could dominate the space in the long run by offering value and software compatibility that competitors like Arm will find tough to match, according to an Intel official.

By building x86 architecture into mobile devices, Intel wants to build compatibility to standardize software use across PCs and mobile devices, said Pat Gelsinger, Intel's senior vice president, in a press event on Monday to celebrate the company's 40th anniversary.

After riding the wave of success for decades by putting x86 chips in PCs, Intel has put x86 into mobile devices with the Atom processor. The x86 compatibility on mobile phones will boost adoption of the chips for consumers looking to run applications on multiple devices, Gelsinger said.

Despite Intel's hopes, the company will have to compete against Arm, a chip designer that has a dominant presence in the mobile chip space and is now looking to challenge Intel by putting its low-power chips in servers.

"In our first foray into wireless devices, we were doing it with Arm. We said, 'Why are we building somebody else's architecture?' We realized that we can take Intel architecture -- x86 compatible -- to those power levels and cost levels. That's what we've proven with Atom," Gelsinger said.

Arm may be exponentially larger in the mobile space, but the lack of a standard software and hardware ecosystem could pose a problem for the chip designer, Gelsinger said. "You have numerous different Arm architectures, multiple architectural licensees that are compatible across Arm, and you have numerous fragmented different operating systems that run on it. There is no... ecosystem."

Arm didn't immediately respond to a request for comment.

The cost of creating custom chips based on designs is also very expensive, which could create cost challenges for new chip manufacturers to enter the space, Gelsinger said. The move to manufacture chips in the 450-millimeter wafers will help Intel reduce manufacturing costs per chip and result in more efficient use of the resources, including water and energy, which could bring prices of the chips down.

Despite Intel's platform and scale advantages, it enters the mobile chip market where it has a minimal presence. It already suffered a major setback when Apple's CEO Steve Jobs last month said it would use technology from PA Semi, a company it acquired earlier this year, to develop system-on-chips for the iPhone.

Gelsinger said Apple's decision was disappointing, but he hopes the company would add Intel back to its mobile road map.

"People haven't been lining up outside ... asking us to deliver these products. We have to go earn this business. We have to do it with superior products."

Beyond Atom, Intel has new products on the horizon that reduce chip size and consume less power, Gelsinger said. The company is developing a mobile platform code-named Moorestown. The platform includes a system-on-chip code-named Lincroft, which is based on a 45-nanometer Silverthorne core, and puts a graphics, video, and memory controller on a single chip.

"Our strategic attempt ... is to take Intel architecture value proposition into the milliwatt range... something... that we've never done before," Gelsinger said. "We are committed to take it to 10 milliwatts."