Intel, Microsoft hegemony threatened by convergence

Opinion While Intel and its customers reliant on PC sales have all been hurting as sales have fallen in the last year, it appears that British design company ARM continues to make waves in the market.

Take Greater China, for instance – a nebulous entity which includes mainland China, Taiwan and Singapore.  According to a report in Taiwanese wire Digitimes, Allen Wu, president of ARM in the Greater China unit, is claiming that application processors, embedded and microcontrol units will show “double digit” growth in 2013. He also said that globally, ARM had improved its share from 17 percent in 2007 to 32 percent in 2012.

All in all, the Asia Pacific region, which includes all the Chinas, now accounts for over 50 percent of revenues, said Wu.

The boasts underline the shift in the market as smartphones and tablets continue to make gains. Rather than a click through, it is now all about “swipe throughs” these days.

And although PCs are far from finished, the rise and rise in tablets and smartphones is sending a clear message to Intel and to the PC giants that the former X86/Windows hegemony is on its last legs.

Microsoft’s Windows 8 appears to be showing way less traction than the company hoped and that’s been compounded by the Redmond’s stubborn persistence in overpricing its own tablet offerings.  Intel Ultrabooks, too, are clearly underwhelming, overpriced, or both for many people.  The combination of poor economic conditions and a perception that notebooks based on the Ultrabook reference designs as costly has led to sales that only a wild optimist could describe as vibrant.

Sophistication of software applications for smartphones and tablets also are clearly at the cutting edge.  When preparing a text message on my smartphone, the software is at a stage where it anticipates what the next word in my sentence will be – with some success.  I’ve seen many previous attempts by Microsoft, with Word, to implement similar functions but they have all fallen far short of the over used word “intelligent”.

The strange thing to me – as someone who has been tracking the computer industry since the 1980s – is that major companies like Microsoft and Intel have refused to see the writing on the wall.  The research team at Intel, for example, consists of extremely bright individuals with a touch of genius – and though the labs repeatedly come up with brilliant ideas, the corporation itself seems to have an inability to commit and to adopt and to adapt.  Both Intel and Microsoft have been banging on about convergence for years, but seem to have somehow forgotten that threatens their existing shares too.

Having followed a large number of computer companies over decades, including DEC, IBM, Microsoft, Intel, HP, Dell and many another, it is clear that Microsoft and Intel have to learn hard lessons from the past. Those that fail to adapt to the zeitgest get taken over or simply wither away as the market moves on without them.

It really is too early to predict the beginning of the end for Microsoft and Intel, but as Winston Churchill memorably said: “It is the end of the beginning.”