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I don't like the idea of x86 compatibility, but yes an ARM LRB would be great. But even there, there are many questions. IE, would you like to have the Jazelle, Thumb, NEON etc.?
Well, let's say i'm totaly not into this field so you could stun us with your techie-talk. But quick wiki visit gave out, that all these are just code improvement techniques over ARM inside processor, that are been subsequently added or improvement to existing one like MMX->SSE.
Anyway LRBni even SSE outperforms all that NEON talks ntm radix-4 engine in c2d, Thumb is advanced power saving technique thru reduced instruction width, and Jazelle (or Thumb-(2)EE) is the only thing that would be great to see on any processor not just ARM. And because those Larabees targets some future power monster rigs Thumb is obsolete from intel standpoint, just like they claim great Atom performance over ARM where something like Thumb would be really usefu. And JIT compiler improvement (Jazelle) on desktop/workstation ... We'll probably see that before from AMD lab than Intel. (It would be great to see that Thumb2 in some UVD power saving technique where we don't need even ~240SP@300MHz for some OHD (2160p) future resolutions in MPEG4.10, and for now ~80SP@300MHz for 1080p are more than enough)
Intel don't need nothing to proof to no one, from their standpoint and marketing will just flood the market with their Larabee.