This in no way eats the x86 market but in fact grows the ARM market.
Of course, the business relationship side is not quite as clear as the technology side if you want to ensure consistent delivery of a lot of parts -- "sell us a bunch of CPUs for this machine designed as a stopgap until we don't need your CPUs anymore", though maybe that is solvable by dealing with AMD.
All that said... I'm perfectly happy with x86 on the desktop and have yet to see any indication that ARM can compete on the types of jobs I still do with "desktop"-class (whether they be actual desktops or laptops) machines, like code compiling, RAW photo editing, video editing, etc.
Apple could help a great deal here, too, if it decides to turn the iPad Pro, into something more like an iOS-based Remix OS-like notebook. In other words, make the iPad Pro more useful by giving it an actual notebook keyboard, and redesign the OS interface a little more to accommodate a desktop environment. Keep the price at least $300 less than a Macbook Air.
Is it Google's doing ? or just Intel competing to the max, and desperately ?