"They can't let a huge chip market like this go unresponded to," added Olds. "Intel also is well aware of the fact that ARM isn't going to stop at phones and tablets. It's on its way up to server-ville and that's a big deal, too. It's not just threatening the cheap laptop. It's going to be threatening the more expensive servers."
Jim McGregor, an analyst with In-Stat, said this won't be a short-term project for Intel. Upping its game to go head-to-head with ARM chips could take Intel several years.
"They are shooting at a moving target that is moving very quickly and aggressively in terms of both hardware and software," McGregor said. "Intel faces many challenges breaking into the mobile market, including business relationships. Intel can be competitive in terms of technology, but it takes an entire ecosystem to compete in the market."
However, Olds also pointed out that Intel won't be starting from zero on this. It already has the low-power Atom processor and the new 3D transistors.
"I think we'll see something significant from them in the next year to 18 months," he said. "This will be incremental. This will be an evolution not a revolution."
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