Nokia’s strategic relationship with the world’s largest chip maker Intel, announced last month, may be very forward-looking and not about to worry any incumbent wireless chipset suppliers, but it is nonetheless threatening to Europe’s local hero, ARM Holdings plc (Cambridge, England).

ARM is the leading supplier of processor core intellectual property into mobile phones through partner semiconductor companies, such as Texas Instruments, Qualcomm and Samsung. But Intel and ARM both want to win on the next battleground – the one that exists in between the mobile phone, where ARM processors lead, and the PC, where Intel processors dominate.

The two companies have been lining up their supporters for a major confrontation over PC-mobile handset convergence for a couple of years now.

We are still in what could be called a period of phoney war. There is almost no market, there are few products, but the accusations and positioning will continue until the clash of the titans breaks out in a year or two’s time.

At the announcement of the relationship Anand Chandrasekher, general manager of Intel’s ultra mobility group, and Kai Oistamo, executive vice president, devices, at Nokia, seemed surprised analysts and reporters wanted concrete statements on the future of the partnership and especially the products that the market can expect would result from their collaboration. “This is a technology partnership [and] so it’s too early to talk about specific products,” Oistamo said, “We will talk about products when we are ready.”

It may be a while before any such products enter the market. It may be that Nokia and Intel don’t know what these products will look like. It may be that they are not even sure how the convergence will play out. But the bad news for ARM is that Nokia seems to be - at the very least - backing both horses in a two-horse race.

And it has to be recognized that in the past Nokia would never have looked at Intel and would have been solidly behind ARM.

We already have the news that Microsoft is not supporting ARM on the Windows 7 operating system. With access to Atom, Nokia is already half way into the x86 world. And with a license for a 3G modem from Nokia, Intel is some way down the road to offering UMTS modems.