If the PC and Intel are joined at the hip, then Intel is hobbled, with 2013's 10 percent drop in PC sales marking "the worst decline in PC market history," according to Gartner.
ARM seems to have picked a better partner. Its chip designs have found their way into a staggering 99 percent of mobile devices, which in 2013 saw increases of 50 and 38 percent in sales of tablets and smartphones, respectively.
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It sounds like a classic David-and-Goliath story: Intel is the reeling giant clinging to its crumbling PC pillar, while ARM is the nimble mobile player with perfect aim that owns the future of computing. But there are problems with that narrative.
Let's start with size. In the last 12 months, ARM pulled in a little over $1.1 billion in revenue, while Intel netted nearly $53 billion. The two companies could scarcely be more different: Intel is vertically integrated, both designing and manufacturing its own chips, while ARM develops intellectual property, period. ARM licenses its processor designs to such stalwarts as Qualcomm, Nvidia, or Samsung, which in turn contract with companies you've never heard of -- such as GlobalFoundries, United Microelectronics, and TSMC -- for the actual manufacturing.
As of October 2013, you can add Intel to that last list. That's right -- Intel actually manufactures ARM chips.
So ARM and Intel are not direct competitors in the classic sense, though it's absolutely true that ARM's approach to the mobile market has been vastly more successful than Intel's. Moreover, although PCs may be on the decline, Intel x86 processors still own the higher-margin server market, where ARM has barely entered the room. It's also clear that the mobile game is not over, as Intel gears up with a fresh line of mobile processors and unique new advances in processor manufacturing.
Why ARM has triumphed in mobile
ARM-based chips have dominated the designs for mobile processors in much the same way that Intel's x86 family of processors locked up the Windows PC market a few decades ago.
A big part of ARM's success, however, has little to do with better technology. It's the company's business model. Whereas Intel builds chips, ARM only designs them, leaving the physical fabrication to its customers/licensees. Whether by accident or shrewd planning, ARM pretty much launched the idea of semiconductor intellectual property licensing.
That was important to Nokia, Ericsson, Motorola, and other early adopters of the ARM processor architecture because those companies were making newfangled devices called mobile phones that needed to be small and run on batteries. All of the traditional microprocessor companies' chips were too big to fit, and they were designed to run on AC power. Some needed fans or heat sinks to stay cool.