An Arstechnica article from February outlines some of the challenges Intel has with the emerging strength of ARM processors. While Ars points out that ARM simply can't beat Intel from a performance perspective -- at least any time soon -- they also point out that they don't have to become dominant in the marketplace.
If it turns out that the ARM ecosystem can get within a factor of two of x86 in terms of performance and performance per watt as ARM chips move to higher levels of size and complexity, and if that ecosystem can simultaneously keep the cost of ARM chips much lower than that of x86 chips, then ARM could do to x86 what x86 did to Alpha, MIPS, SPARC, PowerPC, and the other RISC workstation architectures. Intel used its process strength to get close enough to RISC workstation and server performance that the PC's status as a low-cost commodity machine gave the PC an edge. We all know how the story played out: the high-end RISC vendors were marginalized, as the lower volumes on their now-boutique chips kept their prices up; meanwhile, Intel relentlessly narrowed the performance gap and moved the PC into new markets because it was dramatically cheaper and almost as good.