Home Technology Intel’s Mobile Retreat Not Good For Microsoft’s Smartphone Plan [UPDATED]

Intel’s Mobile Retreat Not Good For Microsoft’s Smartphone Plan [UPDATED]

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Intel and Microsoft have been in a business relationship for the past 35 years, but Intel’s retreat from mobile chips can be seen as a big disruption in their relationship. The two companies have been on rough terms before, but it has not been like this ever, and this raises a serious questions on Microsoft’s mobile investments, says The Register.

‘Wintel’ coming to an end?

Steve Ballmer, the rebel shareholder and former CEO, already believed that a universal Windows strategy had ended. Now with Intel’s withdrawal, the odds against its success have increased. Microsoft’s OS ran on all client computing CPUs almost a decade ago.

However, a lot has changed in the past decade. Now just one-third of connected devices are Microsoft devices, and the proportion is falling every year. The world has shifted to mobile, and mobile means ARM, not x86. The computing platform for the next billion users will undoubtedly be ARM, just as it has been for the last billion, the report says.

For Microsoft, Intel’s Atom chips were the only low-power, low-cost chips capable of running x86 Windows software natively. Apps that were adaptable and portable (Universal Windows Applications or UWAs) and multi-mode computing (Continuum) were the two things around which Microsoft developed its clever and courageous strategy.

UWA apps are capable of running on Xbox consoles, ARM tablets and phones, while Continuum makes it possible for a device to adapt itself into a fully fledged desktop. Doing the multi-modal Continuum trick today is possible only for UWA apps.

Surface Phone without Intel: not attractive enough

Rumors claim that Microsoft was assuming Intel would provide the chips it needed to relaunch its mobile efforts next year with an Atom-powered Surface Phone that would do the multi-modal trick. With a Surface Phone (if it comes), Microsoft could claim that people can completely dispense with the PC and instead carry a phone with them all the time.

Intel does not kill Continuum, but because of it, the combined multi-modal/portable proposition seems much less attractive and unique. Without support from Intel, the Surface Phone is only as much attractive as the Lumia 950 models of today that lag their Android counterparts in terms of app availability and quality, the report says.

At 9:45 a.m. Eastern, Intel shares were down 1.26% at $29.72. Year to date, the stock is down almost 15%, while in the last year, it is down almost 11%.

Update: Intel has confirmed that they are not cancelling Cherry Trail Atom x5 and x7. Here is their statement, emailed to ValueWalk

Intel is accelerating its transformation from a PC company to one that powers the cloud and billions of smart, connected computing devices. We will intensify our investments to fuel the virtuous cycle of growth in the data center, IoT, memory and FPGA businesses, and to drive more profitable mobile and PC businesses. Intel delivers a broad range of computing and connectivity technologies that are foundational to this strategy and that position us well to lead the end-to-end transition to 5G. Our connectivity strategy includes increased investment in wired and wireless communications technology for connecting all things, devices and people to the cloud, and to power the communications infrastructure behind it.

While we continuously evaluate and optimize our roadmaps and projects based on a range of measures including market dynamics and competitiveness, we re-evaluated projects and made changes to better align to this strategy. I can confirm:

  • The Broxton platform for phones and tablets is cancelled, effective immediately
  • SoFIA 3GX, LTE and LTE2 commercial platforms are cancelled, effective immediately

We are committed to long-term leadership and improved profitability of our mobile business and the decision to cancel Broxton for phones and tablets and SoFIA 3Gx/LTE/LTE2 enable us to move resources to products that deliver higher returns and advance our strategy.

There were some reports that Cherry Trail was also discontinued. That is not accurate. We will continue to ship Cherry Trail Atom x5 and x7, and we will continue to work with OEMs to develop new 2 in 1s based on Apollo Lake and of course Core M for detachable 2 in 1s.

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Aman Jain
Personal Finance Writer

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