Is Intel Corporation (INTC) Doomed?

A new challenger?

But as we enter the era of smartphones and tablets, Intel’s dominance is coming into question. In the same way that Intel dominates the PC market, ARM’s chips dominate the handsets and tablets market.

Intel’s Atom chips compete with ARM’s chips, but ARM’s are much more energy efficient than Intel’s. This drastically prolongs the battery life of the device — which is usually more important than performance.

It is possible that many consumers view low-end PCs and tablet devices as substitutes, which means that Intel must capture part of the tablet market in order to avoid losing sales.

While Intel is clearly behind in the race, one chart gives me confidence that it will soon catch up:

It will not be long before Intel Corporation (NASDAQ:INTC)’s better-performing (i.e., faster) microprocessor will become energy-efficient enough to make ARM’s chips an afterthought.

Bottom line

In most industries where economies of scale provide a competitive advantage, many firms share near-equal scale — creating a competitive environment among current players. However, no other chipmaker even comes close to matching Intel’s scale. Thus, Intel will always have a larger R&D budget and will always dominate the industry.

The article Is Intel Doomed? originally appeared on Fool.com and is written by Ted Cooper.

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