Single core Intel Medfield chips are still measuring up to competing dual cores ARM
Single core Intel Medfield chips are still measuring up to competing dual cores while maintaining energy efficiency.
Further testing with the quad-core Snapdragon S4 processors by Qualcomm showed that they perform only slightly better than the single core processor from Intel. Intel has a higher performance Medfield chip slated for early next year that sports dual cores and LTE capability. Intel's new chips should outperform both ARM and Qualcomm processors. More importantly the Intel chips will be able to not only outperform ARM and Qualcomm chips, but do it using just as little power from those tiny smartphone batteries.
Also, Intel has a distinct advantage over ARM with respect to getting their new products to market. The ARM Cortex A9 design was completed three years before you could buy a phone that was using it. Intel has ARM clearly beaten in this arena. Intel's instruction set programming and core architecture development can be done internally. This is not the case with ARM Holdings. Also Intel doesn't have to collaborate with an outside manufacturer once their chip designs are finalized, they've got the most advanced processor factories on the planet. ARM, on the other hand, relies on outside manufacturing from sources like Taiwan Semiconductor and United Microelectronics to produce their chips.
Could it happen to ARM?
ARM has been riding high on the smartphone boom for the last three years -- and I suspect that growth will continue for a little longer. But think back to the 1990s and the rapid growth of the PC market. Intel shares rose in value by about 20 times during the 1990s -- yet today they trade at much the same level they did in late 1999.
My suspicion is that something similar will happen with ARM. At some point, its technology will mature and something else will take its place, leaving ARM to become a more typical large-cap share, delivering profits, dividends and moderate growth.
The problem is that this transition could be painful for ARM's shareholders, as it is likely to involve a substantial re-rating of its share price to more normal levels -- perhaps less than 20 times earnings. Intel today trades at a P/E of just 9.9.