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Google’s (NASDAQ:GOOG) Android operating system is helping to facilitate a wave of new smartphones, tablet PCs, netbooks and smart TVs that are powered by more capable processors chips than in the past. Smarter devices (PCs, TVs, phones) are putting semiconductor players like Intel (NASDAQ:INTC) and Qualcomm (NASDAQ:QCOM) increasingly at odds with one another.

Intel, known for its notebook and desktop processors, makes the Atom processor which is now a part of the fast-growing Android ecosystem through agreements to power Logitech (NASDAQ:LOGI) and Sony (NYSE:SNE) devices that are part of the Google TV initiative. With the launch of Atom’s Z series, Intel will expand its presence into the smartphones category.

Intel’s entry into the smartphone chip market threatens Qualcomm which is currently a major chip supplier to companies like Motorola that make Android-based smartphones. Furthermore, competition is expected to intensify as the separation between smartphones and netbooks blurs with the introduction of hybrid “smartbook” devices.

Atom Z series to Compete with Qualcomm’s Snapdragon for Android-based Smartphones

Android-based smartphones are on a roll with new vendors coming up with their Android handsets in an attempt to get a pie of the lucrative and fast-growing mobile computing sector. According to mobile analytics firm Admob, 7 out of the top 10 selling smartphones in February 2010 used Andriod as the operating system.

Qualcomm’s chips are prevalent among smartphones today and the company is the leading supplier to smartphone vendors such as Motorola (MOT), Google, LG, Samsung, Acer, T-mobile and HTC. Specifically, in the CDMA bracket, Qualcomm chips are used in more than 65% of the mobile phones sold.

Atom Z600, the first mobile platform capable of running 1080p HD video successfully, can pose a strong threat to Qualcomm’s Snapdragon processor with growing computing demand among smartphone users. Moreover, Intel’s mobile processor promises a longer battery life which has been a key issue with Snapdragon.

Qualcomm, however, is trying to counter Atom’s threat by releasing its dual-core Snapdragon chipset, which is also expected to support 1080p HD videos and has a longer battery life than its predecessors.

You can modify our forecast for Qualcomm’s chip market share within the mobile phone market above to see how much Qualcomm’s stock could be impacted if the company were to lose share to Intel.

Smartbooks Lead to Greater Intel-Qualcomm Competition

The competition between Intel and Qualcomm will intensify further with the launch of smartbooks, a hybrid of smartphones and netbooks. Smartbooks will be powered by Snapdragon’s new chips and are expected to compete directly with netbooks and tablets. Intel will surely feel the heat as it is a major player in the netbook and tablet PC processor markets.

Source: Google Driving Increased Competition Between Intel, Qualcomm