After years of operating in Intel Corp.'s shadow in the PC and server market, ARM Holdings PLC showed signs of breaking ahead at this year's Mobile World Congress.

The microprocessor and chip designer beat rival Intel in two notable devices unveiled at the annual mobile trade show: Microsoft Corp.'s mixed reality headset HoloLens 2, in which a processor designed by ARM replaced an Intel chip featured in the first version of the device; and Chinese PC-maker Lenovo Group Ltd.'s new 5G-compatible laptop, which will use an ARM processor. While more 5G laptops are expected this year, Lenovo was the first company to unveil a design with the next-generation wireless network compatibility.

ARM's processors are used in most smartphones, smartwatches and other devices, including the iPhone and Apple Watch. ARM licenses chip designs to third-party companies such as Samsung Electronics Co. Ltd., Apple Inc., QUALCOMM Inc. that then tweak the design to fit to fit their devices.

ARM is trying to make its up way up the computing food chain from low-power devices to PCs, which have been dominated by Intel for about 30 years. Intel's chips, which are based on a different architecture called x86, are considered more powerful, but they also create a bigger drain on battery life than ARM's designs.

ARM's MWC displays come amid ongoing speculation that Apple will remove Intel chips from Macs in 2020 and replace them with ARM-based chips. Any decision by Apple to use ARM in its Macs could hurt Intel's chip shipments. Apple held a 7.3% market share in worldwide PC shipments in 2018, according to research firm IDC.

Chips based on ARM are reaching the performance levels needed to be considered for higher-performing computing devices outside of smartphones, said Kevin Krewell, an analyst at Tirias Research.

He noted that newer types of computing devices are opting for ARM and said an ARM design makes sense for Microsoft's HoloLens 2 in particular. Qualcomm — which provided an ARM chip called Snapdragon 850 for the HoloLens 2 — has consistently supported mixed reality, unlike Intel, Krewell said.

"The low power of Snapdragon gives better battery life and runs cooler. Battery life is still not great, but three hours continuous use is good enough for most industrial applications today," Krewell said.

As more computing moves to the cloud, ARM laptops will appeal to those who run mostly internet-based applications, much like on smartphones, Krewell said.

Apple's Mac or a differentiated product like a Chromebook, a laptop powered by Google LLC's Chrome OS, could bring success to ARM in PCs, said Dean McCarron, principal analyst at Mercury Research.

But Intel's long history makes it hard to beat in PCs and servers, McCarron said.

Software like Windows, computer designs and the supply chain all have been built around Intel products.

"It's not completely unpenetrable, but it's a massive installed base to overcome," McCarron said.

There has long been a debate on whether ARM chips can match Intel on performance, but a custom ARM chip from Apple will be able to compete with Intel PC processors, said David Kanter, a consultant at Real World Technologies.

"Apple's internal designs are much more powerful than standard ARM cores," Kanter said.

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