well also didnt AMD buy Alchemys MIPS processor in 01-02 and started making the OMAP's that were whipping up on intels Xscales back then. Did AMD give up on MIPS?
Believe me, there are plenty of other mobile devices that use ARM processors besides PDAs: Cell Phones, Nintendo DSes/GBAs, iPods, etc. I strongly doubt that there will be a shortage of embedded processors any time soon :)