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Everyone is well aware that the PC world is having a tough time. It's become very evident that there is a steep decline in PC usage over the past couple of years. Mobiles and tablets serve the purpose for users these days. So who's suffering? Well, major PC manufacturers like Dell (NASDAQ:DELL), IBM and a few others have entered other lobbies and seem to be doing well there. Its chip manufacturers like Intel (NASDAQ:INTC) that seems to suffer.

Intel's performance in the last quarter shows that they are having a tough time when it comes to generating revenue, as compared to a year ago that is. There was a dip in revenue from $13.9 Billion to $13.5 Billion and Intel reported a fourth quarter earnings of $2.5 Billion which is roughly 27% lower than the quarter reports a year ago. With the demand of PCs dipping 3.5% last year, Intel is at a very challenging position because 64% of Intel's revenue comes from PC chips.

Okay, so by the look of things PCs are getting old and Intel has to come up with something bright and innovative, or do they? One thing is for sure, relying on PC chips alone is not going keeping feeding their employees. Intel does not have to come up with an all new gadget to survive in this market, all they have to do is to venture in mobile and tablets properly.

ARM holdings (NASDAQ:ARMH) is the company Intel should monitor and challenge. This U.K. company manufactures PC chips as well as designs other chips for other companies like the giant Apple (NASDAQ:AAPL). Is ARM holdings riding on Apple's fame? I would say so. They've been blessed with a stable presence in the market primarily because of the success of Apple's iDevices. Despite the comfy ride so far, Intel has an opportunity to wiggle its way in. ARM holdings have been asked to cut down on their orders, this is because of the sudden dip in the share value of Apple caused by the slow sales of the iPhone 5. Apple's dip from a high of $705 in September to a present share price hovering around $500 has caused a panic amongst investors. A debt free balance sheet and a cash cache of $121 Billion at the end of 2012 suggests that $500 is a cheap price as far as Apple is concerned, still not affordable for many though.

ARM holdings has also been affected by the strong bite Apple has taken in the last quarter. Their shares hit $41.85 a figure the company hasn't seen since March 2000. This is where Intel has to capitalize in order to get back in the game. Intel has already made solid moves, at the recent CES held at Vegas, Intel showcased their latest Atom processor platform. I found it very smart for Intel to feature this processor in low end phones as well, this gives them the opportunity to spread their presence in a market where they should have already been dominating. With the global population over 7 Billion and over 600 million smartphones in 2012, the mobile market is at a boom and I feel Intel is making a late yet smart comeback. Developing countries still prefer low end smartphones over the iPhone, which means that owning Intel is a less expensive and an effective bet when compared to Apple.

To conclude, Intel has given in and moved into the lower end segment as well. For such a company to finally set its pride aside and attend to the need of the hour shows that they are getting ready for a comeback. Would I buy a cheap phone powered by an Intel chipset? Oh yes I would. Keeping this in mind, brace yourselves for an Intel showdown very soon.

Source: Intel's Turn To Chip In