The first smartphone powered by Intel-designed microprocessors is going on sale, just as the world's biggest chipmaker launches a third generation of Core microprocessors that it intends will defend its PC territory from mobile competitors.
The Xolo X900 from the little-known Lava handset maker is available in India from today for around Rs 22,000 ($423). It represents Intel's attempt at a breakthrough into a phone world dominated by chips based on designs of the UK's Arm.
At an event in San Francisco on Monday Intel is launching a new family of Core microprocessors, called Ivy Bridge, which shrink circuit widths from 32 to 22 billionths of a metre (nanometres), offering better performance.
Ivy Bridge's advances could help Intel fight off competition from Arm-based mobile-phone chipmakers who can see a route into the PC market through Microsoft releasing its Windows 8 software this year "the first Arm-compatible version of its operating system.
Intel has launched its largest advertising campaign in a decade to promote its Ultrabook concept of thin-and-light laptop computers and aims to supply chips for tablets â€“ another Arm-dominated category.
Rob Enderle, technology analyst with the Enderle Group, says: "The ultrabooks and tablets are where Intel and Arm's supporters are really going to be fighting for turf.
"Whoever wins this middle ground is going to have a lot of momentum going into PCs or phones." Intel has traditionally offered faster chips, but has not been able to match the battery-saving low power draw of Arm processors.
As it shrinks its chips further, it will be in a better position to compete, according to Sumit Dhanda, semiconductor analyst at the ISI Group.
"If you look at Intel's roadmap over the next two years, they are really pushing the manufacturing technology transition faster than anyone else," he says.
"Sometime in late 2013, early 2014, they will be at 14-nanometre manufacturing for smartphones and have close to a one-generation lead."
Its Arm rivals generally rely on Asian foundries to make their chips and Qualcomm warned last week it was having trouble getting enough 28nm chips from its suppliers.
While the Lava launch represents a small beginning for Intel, it has announced bigger names, including Motorola and Lenovo, also have Intel-based phones in the pipeline.
The company produced its own Arm-based chips in the past under the XScale brand, with some featuring in BlackBerry phones. But it sold the business to the chipmaker Marvell in 2006.
The new phone has a single-core 32nm Atom processor. A dual-core, 22nm successor is expected later this year.
The Ivy Bridge launch should boost Intel in the current quarter, but analysts at Canaccord Genuity predicted last week that a PC recovery could stall in the third quarter as consumers delay purchases in the important back-to-school season â€“ awaiting the arrival of Windows 8.