Microsoft's (Nasdaq:MSFT) Moving to ARM (Nasdaq:ARMH) a Disaster for Intel (Nasdaq:INTC)?

To say the move by Microsoft (Nasdaq:MSFT) to run Windows with ARM (Nasdaq:ARMH) chips could hurt Intel (Nasdaq:INTC) is an understatement. There's no doubt this is a huge blow to the company with extraordinary implications, or at least, potential implications.

Canaccord Genuity noted, "Microsoft confirmed that its next release of Windows will run on chips from ARM Holdings. At the Consumer Electronics Show, Mr. Softie demonstrated a 'technology preview' by running Windows on an ARM-based device. The full windows system currently only works on Intel-based chips (including chips from Advanced Micro Devices (NYSE:AMD)). Shares of ARM rose to a ten-year high on the back of this news. The Microsoft/Intel partnership, often referred to as a 'duopoly,' is being eroded by the rapid growth of mobile devices, including smartphone and tablet computers. Both tech giants are lagging in the mobile computing market, and are working to capture the leadership they share in the non-mobile market. One analyst commented that the significance of Microsoft’s move away from Intel is 'hard to overstate.' This shift could allow ARM to get its chips into high-end tablets and low-end notebook computers, further chipping away at Intel’s dominance. ARM’s business model is different from Intel’s, as ARM sells its CPU designs and blueprints for others to build. Apple’s (Nasdaq:AAPL) iPad and iPhone use chips with core design technology from ARM."

Microsoft was trading at $28.35, down $0.47, or 1.61 percent, as of 11:40 AM EST. Arm Holdings was trading at $21.76, down $0.02, or 0.09 percent. Intel was at $20.45, down $0.32, or 1.54 percent.