Intel Corporation (INTC) and ARM Holdings plc (ADR) (ARMH) Entering a Price War?

Potentially better opportunities

Since we’re looking at was is gearing up to be a fiercely competitive fight in the microprocessor market, the products will inexorably get better and likely get cheaper.  This will cut into Intel’s and ARM’s margins, but it will also create a better, cheaper product for the consumers. Many other companies will directly benefit from this.

The most obvious one is Apple Inc. (NASDAQ:AAPL). It operates precisely in the high-end mobile market that will be the most competitive. Instead of basically being stuck with ARM chips, it will be able to choose between Intel and ARM chips. Which one it chooses will have a major effect on that those companies, but Apple Inc. (NASDAQ:AAPL) wins either way. It can offer a better product without having to raise the price at all.

Another slightly obvious one is Google Inc (NASDAQ:GOOG). It benefits in a multitude of different ways.  First, its able to produce better quality and less expensive products through its Motorola Mobility and Nexus divisions. Furthermore, and more importantly for its bottom line,  these chips will benefit consumers worldwide causing many of them to get online sooner and spend more time there. This feeds straight into Google Inc (NASDAQ:GOOG)’s advertising business, and thereby make money hand-over-fist.

Other companies such as HTC and Samsung will also benefit a great deal from this competition for similar reasons. Sadly, they are not listed on U.S. exchanges which makes investing in them riskier. To wrap things up, Intel Corporation (NASDAQ:INTC) and ARM Holdings plc (ADR) (NASDAQ:ARMH) are entering into what is essentially a zero-sum game in the mobile space. This will cause both of their margins to shrink. However, no matter how that fights ends up, the firms who buy their products will be better off, and so it might make sense to invest in those companies instead.

The article Intel and ARM Entering a Price War? originally appeared on Fool.com and is written by Paul Sangrey.

Paul Sangrey has no position in any stocks mentioned. The Motley Fool recommends Apple, Google, and Intel. The Motley Fool owns shares of Apple, Google, and Intel. Paul is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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