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12/16/2011
04:12 PM
Art Wittmann
Art Wittmann
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What If Microsoft And Intel Weren't Two Years Late?

Both companies made recent moves to put themselves in better stead to compete in phones and tablets. What if they'd done it two years ago?

Intel this week rearranged the deck chairs on the Titanic known as its mobile devices groups. What used to be four separate divisions within Intel--netbooks and tablets, ultra mobility, mobile communications, and mobile wireless--now will be combined into one group, which will be called the mobile and communications unit. The news comes on the heels of the earnings warning from the company, and was preceded by a similar move from Microsoft that saw Windows Phone division chief Andy Lees relieved of day-to-day responsibility of that product line.

There can be little doubt that both Microsoft and Intel were caught flatfooted by the boom in smartphones and tablets, but one has to wonder whether there's more to it than simply being two years late to the party. Particularly in Intel's case, the move seems a sensible one that was made years too late. By simply creating intellectual property and licensing it, ARM had essentially done years ago what Intel is doing now. By licensing its processor to Nvidia, TI, Qualcomm, Apple, Samsung, and others, it's allowed those companies to create systems on chip (SOCs) that played to their strengths and led to great parts for innovative phones and tablets. Meanwhile, one can just imagine the inter-division friction that's gotten Intel so late to this game and continues to slow the company down in unnecessary ways. The only real question is why it took Intel top management this long to get their internal structure aligned to the single focus of creating great phone and tablet guts.

The upshot is that for both companies, missing the wave is a very big part of why Atom and Win Phone/Mobile are relegated to single-digit market shares. But I also wonder how much better these companies would have done if they had been on top of their game. In Microsoft's case, there is, of course, the matter of Redmond wanting its slice of each phone that runs its OS. Under healthy competition (where, say, Apple's, Google's, and Microsoft's operating systems all are viewed in the same light and all have similar phone and app ecosystems), Google would probably have a slight advantage with its licensing policy, probably to the tune of about $50 per phone. But as it stands, Microsoft just wants market share so you can bet at this point it's more about subsidizing than it is about extracting licensing fees.

For Intel, even if it had seen the wave coming, it wasn't in the phone business and others were. So by ARM licensing its intellectual property, it had a smoother path into this market than Intel would have had under any circumstance. The licensing model also allows for a lot more innovation at the SOC level. Intel makes lots (and lots and lots) of variations of its chips, but Nvidia has its expertise, and Qualcomm has its. Through the licensing process phone makers get a lot of choice--inevitably more than they would have gotten from one dominant manufacturer.

At the OS level, Google has been far more willing to let device makers customize Android than Microsoft ever would have been or probably will be. While Apple's closed ecosystem gives you an experience that's something like an elevated McDonald's (tastes the same everywhere), Android makes it a free-for-all that appeals to developers and users. That's not to say that the features and user interface and price and performance of devices and operating systems don't matter, but it appears that other things, such as an open ecosystem, matter just as much.

So, had Intel and Microsoft been more on their game, would it have made a difference? Of course, it would have mattered some--instead of a two-horse race between iPhones and Android phones, it would have been a three-horse race. But I doubt Wintel could have ever dominated phones and tablets like it does PCs and notebooks.

Art Wittmann is director of InformationWeek Reports, a portfolio of decision-support tools and research reports. You can write to him at awittmann@techweb.com.

To find out more about Art Wittmann, please visit his page.

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ANON1237925156805
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ANON1237925156805,
User Rank: Apprentice
3/21/2012 | 9:04:30 PM
re: What If Microsoft And Intel Weren't Two Years Late?
That's true but then again Newton was > 5 years too early and while not half baked it answered a need that wasn't yet out there and it was limited by the technology that existed at the time. The difference I think was in the Apple culture. Mr. Jobs and the team tha the surrounded himself with seemed to be able to learn from past failures without being scared to try again. Apple's turnaround could never have happened without that quality.

I read plenty of references to Newton when rumors of the "iSlate" surfaced. The Apple team knew that the technology was mature, they had a winning design team, and the market was ready. So they went forward.

Intel had some challenges in the core architecture of its chps; it's understandable that they didn't leap right away. MS is more of a mystery. I guess that Mr. Ballmer was still too busy explaining why smartphones were a passing fancy to see that tablets were the next PC.

I agree that Wintel could never have dominated this market as they once did PCs but they could have avoided the risk of going on life support. And Microsoft in particular could have triangulated a position between the totally closed world of Apple and the chaotic multi-flavor world of Android that might have been the sweet spot for many users. At this point they've got no margin for error but it ain't quite over. . .
CelticBrewer
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CelticBrewer,
User Rank: Apprentice
3/21/2012 | 11:24:27 AM
re: What If Microsoft And Intel Weren't Two Years Late?
A better question would be, what if MS and Intel weren't 5 years too early and put out half baked ideas that failed?
Guest
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Guest,
User Rank: Apprentice
12/20/2011 | 11:36:55 PM
re: What If Microsoft And Intel Weren't Two Years Late?
I thought Itanium (Itanic) was the Titanic at Intel?

Anyway, I think you nailed it. The device makers want to use Android over Windows in large part because Google will let them alter the OS and user experience. It gives them a chance to differentiate their products and not be in a pure commodity market (e.g. Windows PCs). Although, if Microsoft would have had their act together, they may have been able to keep that thought out of the OEM's heads. Now the genie is out of the bottle. How you going to keep them down on the farm after they have seen Karl Hungus?

Intel doesn't do low power well. It is kind of the nature of x86 and CISC, although Intel has been good at squeezing as much as possible out of x86. Similar situation, if Intel would have put out something that would have worked for Apple and the Android OEMs, they may have been able to head off ARM. Now people have rediscovered RISC and it is going to be hard for Intel to convince OEMs that they should pay more for the "Intel Inside" sticker. Also, as Steve Jobs said about Intel when choosing ARM, why tell Intel everything you know and help them build the chip when they are just going to turn around and sell it to your competitor?
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