Intel lays down smartphone challenge to Arm The deals, said Paul Ottelini, chief executive of Intel, are "just the beginning" of the companies' relationships. Certainly investors took note. Arm shares fell 2.6pc on the news. However, even with this significant foot in the door, Intel has a long way to go before it becomes a serious rival to Arm in the market for smartphone microprocessors. For starters, Intel's chips have traditionally been premised on their processing power, whereas Arm's are all about energy efficiency - less important in PCs, but crucial in mobile handsets where advances in capability consistently outstrip battery power. Intel claims it new chips are better than anything on the market today, but the world of smartphones moves quickly. They are not due to launch for several months yet, into a markedly different landscape. Then there is the matter of software compatibility. Both the Lenovo and the Motorola handsets will use Google's Android operating system, and will need to support an ecosystem of apps designed to run on Arm hardware. However, Arm's biggest defence is its acclaimed "ecosystem" model, whereby it designs chips for a host of different manufacturers, and then licenses those designs to them. Arm is deeply embedded in the entire process. In a high-stakes industry, few mobile producers will be willing to experiment with new partners unless there are significant technological gains to be had - either that, or Arm screws up. "Companies which have large supply arrangements with Intel might work with Intel as a goodwill gesture, but that doesn't mean they will sign major agreements," says Nick James, an analyst at Numis. That's the thing with ecosystems and communities. They don't mess with things which are working.