Re: Does having an Intel CPU lower the total cost?
Battery is cheap enough, and all the phone and chip makers know that SoC is better than discrete components. The Orange San Diego is a very passable first stab, using the Atom (Medfield) and relatively speaking low end graphics.
The main difference between Intel and ARM is simply that ARM sell the IP, and let others design onto and around that, and ARM also expect others to manufacture those designs. WIth Intel they want to go the whole hog of design and build, so you're paying for their fab, you're playing on their rules, and if you want anything different you can go swing. Potentially the Intel solution can be as cheap as ARM, and cheaper still if they don't make different versions for every phone.
If you were a second rank smartphone maker (or lower) making thin pickings from your own ARM based phones, then it might be worth taking Intel's shilling, sacking your ARM-skilled design team and accepting that you're going forward as a commodity phone maker on low margins. (HTC? Nokia?). The leaders will probably continue to want to use ARM because they can innovate, at least for the next few years.
Longer term, about 2017-2020 we're looking at 10nm processes that will put the power of a current desktop into a mobile phone, and then I think the game might start to shift in Intel's favour, as people start to want their phone to do the things that we currently expect of a full sized computer. But even then, the excitement may not be on the CPU, but on the GPU, in which case we're looking at Nvidia and Imagination. AMD's purchase of ATI may prove to have been an inspired move, but executed a decade too early.