In this paper we present detailed profiling results and identify the time critical algorithms of the Long Term Evolution (LTE) layer 2 (L2) protocol processing on an ARM based mobile hardware platform. Furthermore, we investigate the applicability of a single ARM processor combined with a traditional hardware acceleration concept for the significantly increased computational demands in LTE and future mobile devices. A virtual prototyping approach is adopted in order to simulate a state-of-the-art mobile phone platform which is based on an ARM1176 core. Moreover a physical layer and base station emulator is implemented that allows for protocol investigations on transport block level at different transmission conditions. By simulating LTE data rates of 100 Mbit/s and beyond, we measure the execution times in a protocol stack model which is compliant to 3GPP Rel.8 specifications and comprises the most processing intensive downlink (DL) part of the LTE L2 data plane. We show that the computing power of a single embedded processor at reasonable clock frequencies is not enough to cope with the L2 requirements of next generation mobile devices. Thereby, Robust Header Compression (ROHC) processing is identified as the major time critical software algorithm, demanding half of the entire L2 DL execution time. Finally, we illustrate that a conventional hardware acceleration approach for the encryption algorithms fails to offer the performance required by LTE and future mobile phones.