The appearance of Google glasses and other wearable smart devices, and the April 2, 2013 announcement from ARM Holdings and TSMC of the tape-out of the 64-bit A57 Cortex processor chip, has caused Wikibon CFO David Floyer to further decrease his already dismal projections for Intel’s future. In his latest Alert, “Intel Nightmare Worsens with Wearable Devices and and 64-Bit ARM Processors” he drops his previous estimate of Intel’s portion of the 2022 Smart Device market from 5% in his original research to 3%, from 30%+ today. This presumes that by then both Apple and Microsoft will have migrated to ARM due to its lower cost and lower power consumption and that the new smart wearable device market will be dominated by ARM.

However, he also warns that Intel faces a serious medium-term threat in its server market. He specifically cites HP’s Project Moonshot of ARM/Linux commodity servers, announced in November 2011. At the time, these were limited by the lack of a 64-bit ARM processor, a serious problem since most server architectures presume 64-bit processing. The Cortex announcement shows that ARM is on target to allow licensees to deliver 64-bit devices in volume by early 2014.

Cortex offers 3X processor power compared to current ARM chips for the same power consumption or 5X power reduction at the same performance levels of present ARM chips. That makes it a powerful competitor for Intel in both the low-power wearable and handheld device markets and in the higher end commodity server, and in particularly the Hyperscale market pioneered by Google, Yahoo!, and other large Internet-based companies but expected to spread to traditional large enterprises over time.

Floyer recommends that CIOs and CTOs include smart wearable devices in their strategic thinking and include them in security and authentication BYOD processes. He expects that 64-bit ARM-based servers will remain mostly in the Cloud rather than moving into many organizations’ data centers for at least the next five years.

Like all Wikibon research, this Alert is available in full without charge on the Wikibon Web site. IT professionals are invited to register to join the Wikibon community. Membership allows them to post their own questions, tips, and research, as well as comment on published research on the site. Members also receive invitations to the periodic Peer Incite Meetings at which their peer present on how they are using advanced technologies to solve business and technical challenges.