For once, Intel knows how it feels to be the underdog.

Over the past 25 years, Intel has risen to become the leading supplier of microprocessors for home and business computing, commanding a virtual monopoly in the market for desktop, laptop, and server CPUs. Even Apple has joined the choir.

But CEO Paul Otellini isn't content to stop there. He envisions a world in which Intel chips power every device, from the grandest server to the humblest media appliance -- a "continuum of computing" that spans many tiers of processor power, all united by Intel's x86 architecture.

[ Linux, Android, Atom, and ARM -- the coming netbook revolution could carve out a whole new niche in computing | Meanwhile huge performance gains in InfoWorld's Test Center review prove Intel's Nehalem owns quad-core ]

Key to this vision is Atom, the most recent entry in Intel's processor line. Compact and extremely energy-efficient, Atom is already the leading CPU for netbook computers. With its latest, ultra-low-voltage versions of the chip, Intel is poised to take x86 even further down Otellini's continuum, away from PCs and into the world of handsets, media players, smart TVs, and other digital electronic devices.

It won't be easy. Intel may be the reigning king of PCs and server CPUs, but in the world of mobile devices, that title goes to an unlikely rival: a small, unassuming company called ARM Holdings, based in Cambridge, England.

Most consumers have never even heard of ARM. You won't see ARM ad campaigns in magazines or on TV. There are no stickers proclaiming "ARM Inside!" The company employs fewer than 1,800 people, and at $3 billion, its market capitalization is a mere fraction of Intel's. But make no mistake -- ARM and Intel are on a collision course. What happens next could determine the shape of the computing industry for years to come.

The next digital frontier
The stakes are high in the market for electronic devices, but the opportunity is massive.

Consider: Intel sold its 1 billionth x86 chip in 2003. Its closest rival, AMD, broke the 500 million mark just this year. ARM, on the other hand, expects to ship 2.8 billion processors in 2009 alone -- or around 90 chips per second. That's in addition to the more than 10 billion ARM processors already powering devices today.

Pick up any mobile phone and there's a 95 percent chance it contains at least one ARM processor. If the phone was manufactured in the past five years, make that 100 percent; that goes for standard handsets as well as smartphones.

The same is true for portable media players. Whether the label says Archos, iRiver, or Sony, inside it's ARM.

You'll also find ARM chips in wireless routers from D-Link, Linksys, and Netgear; printers from HP, Konica Minolta, and Lexmark; graphing calculators from HP and TI; GPS devices from Blaupunkt, Garmin, and TomTom; and countless other devices. Even the flight information system on Burt Rutan's SpaceShipOne was powered by ARM.