Yes, Wintel (x86) dominance is waning

The dominance of the Intel-Microsoft cartel is slowly waning, with the two industry heavyweights forced to play catch-up with rivals in a brave new mobile era.

According to IHS iSuppli analyst Craig Stice, Wintel is expected to suffer a declining share of the “new” computer market – which includes PCs, as well as the rapidly expanding smartphone and media tablet segments. 

“Microsoft’s share of the operating system market for the three products combined is expected to slip to 33 percent in 2016, down from 44 percent in 2011,” Stice confirmed.

“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.”

Stice also noted that Microsoft and Intel once “marched shoulder to shoulder,” dominating the lucrative PC market with their closely tied operating system and microprocessor technologies. Indeed, Wintel traditionally extracted the majority of the profits in the PC segment, controlled every move and compelled all other players to either comply or risk being forced out of the rigged 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,” Stice observed.

”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.”

The IHS analyst also pointed out that ARM architecture has long been the leader in the smartphone market. Santa Clara, although dominant in the PC world, has yet to make much headway in this segment.

“We estimate Intel has been able to capture only 6 percent to 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,” said Stice.

“[Clearly], 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 percent share in 2011, although the company is expected to make advances in the market in the coming years.”

Similarly, 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 (TI) are also dominating the processor market, leaving Intel out in the cold. Equally, Apple’s iOS and Google’s Android have controlled the operating systems for tablets, effectively excluding Microsoft from the mobile party.

Unsurprisingly, Intel’s response to the new paradigm has been to go back to the notebook – its bread and butter – by completely revamping the form factor to make it ultrathin, ultraportable and ultramobile. 
However, Intel is also making moves to compete directly in the media tablet market by promoting its Atom microprocessor directly to makers of Android operating system-based media tablets. For Santa Clara, this represents a fundamental departure from the Microsoft-centric approach to the PC market and toward an operating-system-agnostic philosophy.

Meanwhile, Microsoft’s response to the end of Wintel is its redesigned Windows 8 operating system. The company has conducted a complete restructuring of its OS, adding a new mobile-oriented “Metro App” tile style, quick reboot, and touch-screen interface. In addition, Windows RT, runs on ARM processor-based platforms, clearly illustrating Microsoft’s attempt to disconnect from Intel x86 microprocessor-based systems to become platform agnostic.

“Wintel now is playing in a new computer market that is a composite of the PC, smartphone and media tablet segments. 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,” said Stice. 

“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. [Clearly], competition is now pushing Wintel to compete and innovate to a much greater degree than in the past.”