From mainframes to minicomputers and then PCs, each new computing generation has displaced its predecessor by reaching a broader audience and costing far less. And each time, the dominant company in one generation loses control in the next.
That’s why the PC industry’s commanding chip maker, Intel, might do well to be alarmed by the computer chips being designed by Qualcomm, a maker of chips for cellphones. An engineer at Qualcomm’s gleaming corporate campus here demonstrated a palm-sized circuit board capable of displaying high-definition video. What was striking about the demonstration was not the quality of the video images, which is now commonplace. Rather it was that the microprocessor chip, called Snapdragon, drives the display with less than half the power of a similar chip recently introduced by Intel. Qualcomm designers say it will also cost less.
As the PC shrinks in size, it is on a collision course with the multifunction cellphone. Many expect the resulting impact to transform both devices and all the companies that make them. The new smartphones, always-on portable Internet devices that are part cellphone, part computer, change the rules of the game in computing because computing speed — at which Intel excelled — is no longer the most important factor. For a cellphone relying on a small battery, how efficiently a chip uses power becomes more important.
The new mobile world represents a special challenge for Intel, which until four years ago ignored the issue of increasing power consumption in its flagship X86 chips, which have been the PC industry standard for almost three decades.
Other chip makers have not ignored power consumption. Just this month at Computex, a huge computer and consumer electronics trade show held each year in Taiwan, the Silicon Valley graphics chip maker Nvidia demonstrated a small mobile computer that worked five times as long on a battery as a similar portable machine powered by Intel’s most recent low-power chip.
Qualcomm and Nvidia share a chip design licensed from a relatively tiny British chip firm, ARM Holdings. ARM has had a big impact on the communications world. Its processors sell for substantially less than Intel’s more powerful X86 chips and are far more numerous: they are standard for the cellphone industry. Cellphones outsell PCs by about five to one.
“This battle is being fought in ARM’s backyard, not Intel’s,” said Michael Rayfield, general manager of Nvidia’s mobile group.
In addition to Qualcomm and Nvidia, there are more than 200 licensees of the ARM processor design, including major chip makers like Marvell and Texas Instruments. Together, they supply the more than 1.1 billion cellphones, many of which use multiple ARM chips. The chips are also used in a growing array of special purpose consumer electronics like G.P.S. navigators and set-top TV boxes.