There was a time when both Microsoft and Intel controlled the entire computer market. Microsoft with their Windows and Office products controlled the software end of the business. So mighty was the axe that Microsoft wielded, that OEM companies who made computers bowed to every whim the Redmond giant asked for. On the flip side Intel has the processor market bottled up. They priced their products the way they wanted and higher meant larger profits to their bottom line. Intel consider AMD like a small thorn in their side and basically continued to dominate the processor market. When Microsoft and Intel joined forces and worked on joint ventures together, the term ‘WinTel was coined.
Times have changed and both companies are feeling pressure from outside companies. But what is going to separate the two companies is that Microsoft has decided to use the ARM processor, an Intel competitor, to power the next version of Windows which most likely will be called Windows 8. In a recent article it also stated that:
While Windows still powers more than 90% of global personal computers, research firm Gartner says Microsoft software ran less than 3% of smartphones in the third quarter. Despite pushing tablets for the past decade, no Wintel tablet has caught on with consumers.
The success of Apple Inc.’s iPad has driven a deeper wedge between Microsoft and Intel. The two companies, in collaboration with hardware makers, haven’t been able to come up with any tablet products that match the performance, power efficiency and ease-of-use of the iPad, a worrying trend as the Apple device has come to nibble into mobile PC sales.
The rise of smartphones—and more recently, tablets—has strained the relationship. A key reason people have long preferred Wintel-based PCs —compatibility with application programs for Windows—has so far not been an important selling point in the new mobile categories. Indeed, Apple and Google Inc. have had success in creating large markets for lightweight apps on smartphones and tablets—to the point that users don’t seem to care much about Windows compatibility.
While this breakup may be news worthy, don’t for one minute think that either Microsoft or Intel and down for the count. Both companies still have major sources of revenue that continue to pour in. I don’t believe that we should open our checkbooks to make a donation to either company. But like the auto industry, one needs to be extremely careful on how the public views your company.
Consumers have little, if any, allegiance to any major corporation.