Adobe Systems Inc.'s (ADBE) move to make Flash software available for handheld devices represents a small but important victory for mobile chip makers in the battle with Intel Corp. (INTC) for the smartphone and mobile markets.

For Qualcomm Inc. (QCOM), Texas Instruments Inc. (TXN), Nvidia Corp. (NVDA) and others, the move lets their mobile chips - based on designs from U.K.-based ARM Holdings PLC (ARMH) - access videos on popular sites like YouTube or Hulu. Previously, only chips for computers could offer full access to those sites, one of Intel's arguments for why its chips have a place in the mobile segment.

With Adobe's help, ARM chips have gained an edge as they battle Intel for a dominant position in everything from cellphones to netbooks.

"ARM is arming itself. It is making its platform more and more attractive, battening down the hatches for the expected Intel onslaught," said Roger Kay, president of research firm Endpoint Technologies.

Monday, Adobe unveiled the latest version of its popular Flash software for smartphones, netbooks and other mobile devices. The software will work on a number of mobile operating systems, including Google Inc.'s (GOOG) Android and Microsoft Corp.'s (MSFT) Windows Mobile, and will let devices running the software access the Flash video on the Internet like a traditional PC.

Without the new Flash version, mobile devices generally can't access Web videos using an Internet browser. Instead of watching the latest Jay-Z video on YouTube, a smartphone user will get an error message or a Flash logo.

But starting later this year, some devices will have that capability. For instance, any mobile device run on Nvidia's Tegra chip will be able to download and install this latest version of Flash as soon as Adobe releases it, said Mike Rayfield, head of Nvidia's mobile unit.

Up until now, "Intel could sort of stand up on a podium and say, 'You can't do the Internet on ARM chips,'" Rayfield said. "In reality, what they were saying is, 'You can't do Flash, and the Internet is Flash."

"Well, now we can do Flash," he added.

Smartphones and other mobile gadgets have represented an important market for chip players, particularly in the current recession. They've been some of the fastest growing areas for tech sales, even as PC growth has declined.

While Nvidia and others focus on bringing a PC-like experience on mobile devices, Intel is tweaking its chips - which dominate the PC market - to run at much lower power levels.

The tech titan has had smashing success with its low-cost, low-power Atom chip for netbooks, and Intel is working on new designs that will let it run even smaller gadgets, like smartphones, which need to work all day on a single battery charge. But those chips won't be available until at least next year, and some analysts have suggested that an Intel chip that has the power levels to be successful in a smartphone is still years away.

Intel said progress in lowering the power levels in its chips will give it access to the high end of the smartphone market with a chip coming out next year.

When it comes to the impact of Adobe's mobile announcement, Intel spokeswoman Claudine Mangano said, "We'll wait to see the actual devices that are in the market that will support Flash."

Meanwhile, ARM chip makers are trying to move from smartphones into more PC-like devices. Qualcomm, with its Snapdragon chip, is promoting devices called Smartbooks that are similar in size and style to netbooks.

"ARM is moving up in terms of software support faster than Intel is moving down in terms of its ability to lower the power," said Nathan Brookwood, chip industry analyst with Insight64. "That doesn't bode very well for Intel."

-By Jerry A. DiColo, Dow Jones Newswires; 212-416-2155; jerry.dicolo@dowjones.com