Here's a different kind of success story this morning—ARM Holdings, a start-up chip maker is actually presenting a serious challenge to Intel, the grandaddy of chipmakers, reports the New York Times.

ARM, a British upstart firm, is slowly pecking away at Intel through its new chips for mobile Internet technology like the iPhone—something Intel has struggled with. Given that the PC continues to shrink in size, and that users are increasingly using smart phones for Internet browsing, many experts say that mobile Internet devices may eventually make traditional PCs obsolete.

Here's where ARM shines. Two of the companies they've licensed technology to, Qualcomm and Nvidia, have been handily competing with Intel by offering chips focused explicitly on answering the challenges of mobile web. While Intel continues to emphasize the computing speed of their chips—which are fast—speed isn't the primary concern when it comes to creating chips for mobile devices. What's more important is how efficiently chips use power. No one wants a dead cell phone after surfing the Internet for five minutes. Qualcomm's Snapdragon chip speaks directly to this. While it has the same high-definition imaging capabilities of an Intel chip, it uses half the power. And Qualcomm claims that Snapdragon's cheaper than the Intel models.

While Intel is unquestionably still the giant in the chip-making industry, what's clear is that a small upstart is actually challenging them. While the Times notes that key partners like Dell are unlikely to ditch Intel in favor of a company like Qualcomm, one wonders that if mobile internet is the wave of the future, if those relationships will even matter.

What do you think?