When it comes to mobile processors, integration is the key to success.

Even though Intel (NAS: INTC) has been incredibly tardy to this party, the chip giant is putting a ton of weight behind its mobile aspirations and its battle against ARM Holdings (NAS: ARMH) and its legion of licensees.

Qualcomm (NAS: QCOM) has always been the top dog with integrating key functions like baseband processing into its ARM-based Snapdragon chips. NVIDIA (NAS: NVDA) is following suit, planning to leverage its Icera acquisition to integrate 3G and 4G LTE into Tegra chips by the end of the year.

Intel's Medfield Atom chip hopes to make a big dent in the ARM-dominated mobile market this year, so this battle is just getting warmed up. At the International Solid-State Circuits Conference, or ISSCC, Intel just detailed a research project it's working on: a dual-core Atom SoC with integrated Wi-Fi, codenamed Rosepoint.

The chip is built on a 32-nanometer manufacturing process, and while still years away from actually seeing the light of day, it represents a major advancement in chip integration. Wi-Fi integration is a particular challenge because wireless radios and processors both give off radiation that can interfere with each other. This level of integration promises to bring even more efficiencies in power consumption and potentially boost signal quality.

Intel is looking at using digital RF chips instead of traditional analog ones to accomplish this, as they are simpler and easier to shrink down to sizes necessary for integration. Intel Chief Technology Officer Justin Rattner said, "With a digital approach to radio, you can bring the benefits of Moore's Law to RF and radio circuits." The company also uses noise-canceling and radiation-shielding methods on the chips to cope with possible interference.

While this announcement is still just a research project in the works, it has some serious implications in the mobile-processor space in the longer term and is an example of why Intel is a credible threat to ARM. Intel has some deep pockets and knows where it needs to focus its R&D, while it enjoys efficiencies from vertical integration as the only remaining domestic chipmaker that doesn't outsource manufacturing.

Intel is a one-of-a-kind leader, so I'm also going to give the chip Goliath an outperform CAPScall today. As an ARM shareholder, I still hope ARM can defend its mobile turf against the Intel invasion, but either way, Intel should be a winner.

For even more on how to play the mobile revolution, don't miss this new special free report on "The Next Trillion-Dollar Revolution." It promises to be the biggest revolution in computing in generations, and it's one you definitely don't want to be left out of. Get access to this free report now.

At the time this article was published Fool contributor Evan Niu has sold bullish put spreads on Qualcomm and owns shares of ARM Holdings, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Intel and Qualcomm. Motley Fool newsletter services have recommended buying shares of Intel and NVIDIA and writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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