The smartphone and tablet categories have most growth currently and forecasted - and ARM is well on top of both. What growth areas is Intel in?
I'm interested, because Intel has a unique history of keeping ahead, and they are well aware of the danger, having done it to others themselves (and Andy Grove even had a blurb on the cover of The Innovator's Dilemma).
There are of course the big chip manufacturers ,but also they don't make much money. Qualcomm made around $200 million per quarter.
It would take a huge amount of growth for this markets to become financially meaningful to intel. probably not gonna happen.
As for future growth , i think there could be plenty of long term growth in servers, alot of growth in robotics and maybe some in netbooks/desktops for the third world. With the move to the cloud, almost everything would be done on the server, and i don't see some limit to the need to new valuable processor-hungry applications.
Intel's real problem is the future competition on the server, both from arm in the form of microservers and multicore server chips, and both from others like tilera and gpu manufacturers.
The main worrying point , is that usually whenever intel won against disruptors, it was in markets when windows was valuable. now that windows is becoming obsolete, can intel win ? can intel be profitable ?
There's huge prediction issue here, of what will happen to the smart-phone market, that reasonable people could disagree about. I believe it will disrupt "PCs", just as PCs disrupted workstations/mini-computers, which disrupted mainframes (the latter of each may still exist, but only in the most demanding applications in the highest tiers).
The reason is that as it improves in performance, it will become good enough for more and more applications (while the PC's improvement will make it more powerful than most applications need); and also offer other benefits: size, consumption, mobility (and multi-touch, GPS, camera). If you can plug your smartphone into your HDMI monitor, mouse and keyboard, and have all your information there, would you still use your desktop?
As for the server, it's widely reported that power consumption is the dominant issue as they grow in size. SSD are of interest for this reason... and ARM cpus will be also. The crucial dimension is processing power/power consumption. Intel is not ahead on this score, only in raw performance per power-hungry cpu. But the really amazing difference is that because the ARM architecture is open to customization, it is possible to optimize silicon performance for highly specialized tasks - instead of writing time-critical code in C, or assembler, you write it in silicon. Or, more generally, you write time-critical modules in silicon, like crucial parts of what key-value stores are doing.
I think we may see the rise of startups integrated along silicon-software lines - like Apple is. Oracle is trying to do this (with Sun's SPARC). Imagine the performance advantage you could get with this! You would annihilate the competition.
I totally agree with your last line about the windows franchise. Once webapps and the cloud get their act together (I'm looking at you reddit/amazon), it seems that windows could indeed be obsolete (as long-forecasted).
OTOH, incumbents traditionally win their markets, even through dramatic technology changes, because they know their customers (they have trouble when their customers change). But this is usually when the market demands more of the same thing... In the server market, power consumption has become more of an issue, over raw processing power, and Intel has already been adapting to it. But they don't have ARM's experience in low-power consumption, nor the flexibility of architecture to optimize for it.
The only difficulty I have is that my analysis predicts that ARM has already won the server market...
There's also an aging factor, in that the firebrand startup founders that made it all happen - andy grove, gordon moore, etc - have retired. Look at HP without H and P.
And regarding the critical code sections becoming silicon: i don't think it's becoming silicon , because of the huge volumes that are require to manufacture silicon. but they might become FPGA code.
FPGA is basically a programmable hardware. it has been used in the past as computer co-processor , in fields like biology, oil and gas and database accelerators. but the main barrier is that programming them is complex and it's hard to find FPGA programmers.
But i see improvements in these areas. convey computer claims that it has made programming an FPGA as easy is c programming. it woud be interesting to have convey computer offer via the cloud.
But let's return to the intel vs ARM servers: according to arstechnica , arm would find it very difficult to offer high per-thread performance at low power. but given a cheap enough arm server processor , and the help of GPU's(and FPGA or other coprocessors) intel could be seriously threatened.
These applications don't really run usefully on a smart-phone form-factor (ie. they could run, but without a mouse nor keyboard...) - nor on a tablet.... so this change of UI requires applications to be replaced, which enables a platform to be replaced. This is what Apple and Android and ARM are doing.
Maybe Intel engineers could create a killer low-power consumption CPU if they were freed from back-compatibilty; but (1) they lack ARM's decades of experience in the space; (2) they didn't do great with Itanium. To be fair, that's probably partly because they were competing with compatibility with their own x86 design - that's what AMD did; but at the same time, they had lots of purely technical problems with it too.
Sorry, I haven't answered your questions, just danced around it with looking at Intel's capabilities. What do you think about their efforts with Atom?