iSuppli: Microsoft/Intel alliance is fraying
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iSuppli: Microsoft/Intel alliance is fraying

After a generation of setting the pace and calling the shots in the computer market, the Microsoft/Intel cartel known as Wintel now finds itself playing catch-up in the new era of smartphones and media tablets, spurring a widening rift in the historic alliance, according to IHS iSuppli (

Despite a flurry of activities to adjust to the changed realities of the technology industry, Wintel is expected to suffer a declining share of the "new" computer market, a category consisting not just of PCs but also of the much faster-growing smartphone and media tablet segments, says the research group. Microsoft’s share of the operating system market for the three products combined is expected to slip to 33% in 2016, down from 44%in 2011, according to an "IHS iSuppli DRAM Dynamics Report."

Meanwhile, Intel’s share of microprocessors will fall to 29%, down from 41%. At the same time, the total size of the market will double from 2011 to 2016, almost entirely due to the strong growth of the smartphone and media tablet segments, as presented in the table.

Craig Stice, senior principal analyst compute platforms at IHS, has this to say: "Microsoft and Intel once marched shoulder to shoulder, dominating the PC market with their closely tied operating system and microprocessor technologies," says. "In the PC segment, Wintel extracted the majority of the profits, controlled every move and compelled all other players to either comply or risk being forced out of the game. While still an overwhelming influence in their respective markets, the tables have turned for Microsoft and Intel.

"With smartphones and tablets performing tasks previously exclusive to PCs, the computer market has expanded to include other platforms. As a result, Wintel finds itself in the unfamiliar position of dancing to someone else’s tune, following standards that were set by other companies for form factors, user interfaces and even pricing. This means Microsoft and Intel must think outside the box -- even if it means adopting strategies that work against each other’s interests."

Wintel outsmarted in smartphones

IHS predicts 655 million smartphones will ship worldwide in 2012, nearly triple the total for mobile computers. From a processor perspective, the ARM architecture long has been the leader in the smartphone market. Intel, although dominant in the PC world, has yet to make much headway in this segment.

IHS estimates Intel has been able to capture only 6-8 %of market share in the mobile handset processor revenue business -- with its small success in this area mostly due to the company’s acquisition of the wireless business of Germany’s Infineon Technologies.

In the smartphone operating system segment, Android and iOS lead the pack. Microsoft’s Windows Mobile has fared even worse than Intel, with less than 2% share in 2011, although the company is expected to make advances in the market in the coming years.

Headache tablets for Wintel

Media tablets sit in the sweet spot between the smartphone and the notebook computer. Similar to that of the smartphone, the tablet growth rate is very strong throughout the forecast period. By 2016, IHS projects that media tablet shipments will surge to 311 million units, about equal to the total mobile computer market at 322 million.

Tablets have given consumers a new choice for their computing needs and now are leaking into the corporate space due to their ultra-portability. Compared to the Intel options, ARM-based processors have generally ruled the media tablet market because of their low power and price. New players like NVidia, Qualcomm and Texas Instruments are  also dominating the processor market, leaving out Intel.
Equally, Apple’s iOS and Google’s Android have controlled the operating systems for tablets, excluding Microsoft from the party.

Win vs. Tel

These developments represent a huge challenge for the two technology giants accustomed to industry hegemony. However, neither is sitting still, as the computer industry has witnessed more innovation in the last nine months than it has in two decades. Significantly, many of these innovations enlarge the schism that is forming between the two companies.

If you can’t beat ‘em …

Intel’s response has been to go back to its bread and butter, the notebook, by making a complete overhaul of the system to make it ultrathin, ultraportable, and ultramobile. The ultrabook represents Intel’s bid to reignite the PC market and draw consumer dollars away from the other computing gadgets.  

However, Intel is also making moves to compete directly in the media tablet market. The company’s solution is to promote its Atom microprocessor directly to makers of Android operating system-based media tablets.

For Intel, this represents a fundamental departure from the Microsoft-centric approach to the PC market and toward an operating-system-agnostic philosophy, according to IHS iSuppli.

Opening Windows

Microsoft’s response is the Windows 8 operating system. The company has conducted a complete restructuring of its operating system, adding in the new “Metro App” tile style, quick reboot, and touch-screen interface, just to name a few changes. All of these are features similar to what would be included in a smartphone or tablet.  

Just as with Intel, Microsoft’s response involves a step away from its traditional partner, notes IHS iSuppli. One version of Windows 8, Windows RT, runs on ARM processor-based platforms. This is Microsoft’s attempt to disconnect from Intel x86 microprocessor-based systems to become platform agnostic.

The new computer market

"Wintel now is playing in a new computer market that is a composite of the PC, smartphone and media tablet segments," Stice says. "While this may be a non-traditional way of looking at the PC market, tradition has gone out the window. The smartphone influenced the tablet, the tablet influenced the PC, the PC wants to become more like a tablet and the tablet more like a PC. It’s a vicious circle in which both Intel and Microsoft must take part, but they are losing control of the game and how it’s played. The Wintel camp is not accustomed to following, but with both companies being excluded of the two fastest-growing markets, they are in catch-up mode."

While this may be hard news for Wintel, the beneficiary is the consumer, he adds. Read more at "The Changing PC and the Impact to the Wintel Dominance" (


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