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Microsoft, Intel alliance declines as Wintel weakens

Posted: 06 Sep 2012 ?? ?Print Version ?Bookmark and Share

Keywords:Android? smartphone? tablet? PC market?

Wintel, the partnership formed between Microsoft and Intel, has enjoyed long years of dominance in the computer market. However, things are spelling differently now for the partnership that is facing a hard time coping with the tremendous growth of not just the PC market, but also the smartphone and tablet segments. Consequently, this has affected the alliance, indicated 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. Microsoft's share of the operating system market for the three products (PCs, tablets and smartphones) combined is expected to slip to 33 percent in 2016, down from 44 percent in 2011, IHS stated.

Meanwhile, Intel's share of microprocessors will fall to 29 percent, down from 41 percent. 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.

"Microsoft and Intel once marched shoulder to shoulder, dominating the PC market with their closely tied operating system and microprocessor technologies," said Craig Stice, senior principal analyst compute platforms at IHS. "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."

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 percent 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 OS segment, Android and iOS lead the pack. Microsoft's Windows Mobile has fared even worse than Intel, with less than two percent share in 2011, although the company is expected to make advances in the market in the coming years.

Media tablets sit in the sweet spot between the smartphone and the notebook PC. 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 PC 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.

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