Much of the PC market has been defined by WinTel, or the ugly partnership between Intel and Microsoft. Well that partnership is at risk this week as Microsoft’s Build and Intel’s IDF fought for attention and Intel showcased Google’s Android head, Andy Rubin who in turn indicated that Google would be optimizing Android for Intel’s Smartphone architecture. This is something Microsoft refused to do with their Windows Phone platform. In short we now have an historic breach between the two firms as at Build Microsoft showcased their work with ARM for Windows 8. Both vendors are now partnering with organizations and technologies that represent the other’s greatest threat.
Let’s look at the Initiatives
Intel’s Ultrabooks and Smartphones
While Intel will clearly have slate tablets as well, their big push is on Ultrabooks, as a tablet alternative, and Intel based Smartphones, which have yet to enter the market. Of the two, the second has proven the biggest problem for the firm because their architecture was initially designed around desktop computers and relatively unlimited heat and power sources.
What we’ve been calling the Post-PC era is defined by ARM at the moment, an alternative technology which was designed to work in areas that were severely limited in terms of thermal and power requirements. As devices based on this technology proliferated Intel saw itself unable to compete in lucrative and fast expanding segments that increasingly seemed to move into the PC space and displace Intel’s core technology.
Most problematic were iPads, which are very PC-like and appear to be approaching 10 percent of the PC market and a much higher percentage of notebook computers. Intel went into overdrive and created their Atom line, which increasingly seemed to provide an improving balance of performance and power efficiency.
Ultrabooks, positioned against Tablets as a better ultra-light alternative to iPad like devices, are the first strategic move against this trend. They are as light as tablets, have notebook like performance, and approach tablet battery life and prices. People don’t like change and Ultrabooks represent less of it than Tablets do suggesting the strategy has merit. But Ultrabooks will have difficulty with a Touch interface because Touch adds size and requires more weight or a kickstand to support the screen (otherwise you have to use two hands, stick the device to the table, or increase the weight so it doesn’t tip when touched.
And that makes for an interesting issue for Windows 8.
Windows 8: A New Approach
Windows 8 is a hybrid product mixing the old Windows interface with a Touch optimized interface called Metro. It has a number of impressive improvements including a near instant restore and a full boot measured in single digit seconds. It is blindingly fast and it represents a transition platform from the way Windows was to the way it will likely become under Metro. In effect it has a compatibility mode for older applications but appears to be designed to drive developers to the Metro side of the product and resulting applications will run on both X86 and ARM platforms (PCs and Tablets) representing access to the near 300M PC market rather than a Microsoft Windows 8 Tablet market which won’t exist in large numbers for some time after launch.
The touch interface is compelling which takes us back to the Ultrabook and its initial difficulty with touch. On Tablets Intel will be supporting Microsoft and Google (and likely increasingly favoring Google), and Microsoft will likely be focused more on ARM and firms like NVIDIA and Qualcomm.
Wrapping Up: Opportunities for AMD, NVIDIA, Qualcomm and Google
Google has an increasing opportunity to leverage this new Intel relationship into larger devices like PCs, while NVIDIA and Qualcomm can do the same with Microsoft and tablets. (NVIDIA and Qualcomm are the power players in the Tablet and Smartphone space in terms of ARM). AMD has an interesting position in that Microsoft and Intel are likely to grow farther apart allowing AMD greater access and support for Microsoft for their PCs (they already have a large percentage of all-in-one touch products) and Laptops (which could also move more aggressively to touch). It could also help AMD establish a foothold in Tablets particularly for those used in business that will need to support legacy X86 applications.
In the end I’m very impressed with both Windows 8 and Ultrabooks and fascinated that the best of both will likely not be Wintel devices indicating a clear end to an era.
President and Principal Analyst, Enderle Group
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