The non-Apple PC market has been called the IBM PC market (a term that clearly aged out when IBM left this market), and the WinTel market conveying the tight partnership between Microsoft (Windows) and Intel. This last was more of an illusion because the two firms historically have not gotten along very well. This is due to a couple of things unique to this market, and they are a lack of clarity as to which company, Microsoft or Intel, directs hardware strategies, and the lack of ability for the OEMs to demand that both of these companies should be subordinate to them as they are closer to the customer than either Intel or Microsoft.
If you look at the smartphone market, it is much more like other markets, where the OEM owns the customer because both the chip vendor (Qualcomm) and the OS vendor (Google) are subordinate and provide a far better chain of command for existing and future products.
This conflict between Microsoft and Intel opened the door for Qualcomm. Suddenly, the Snapdragon X Elite isn’t just a contender, it is the featured product for Microsoft’s Copilot+ AIPC launch (which is a bit of a mess but will get better).
Let’s talk about this battle for the heart of the AIPC this week.
Apple’s Success Drove Change – Intel Blinked
Microsoft has always envied Apple’s customer loyalty and user experience. While Apple’s sales and manufacturing model favoring vertical integration does reduce Apple’s sales reach, this model has led to far higher customer satisfaction and loyalty scores over time, and Apple was successful with smartphones where Microsoft was not.
Apple’s success with the iPhone and MacBook convinced Microsoft it needed a hardware solution far closer to Apple’s, so it went to Intel asking for an energy efficient CPU/GPU/NPU and support for its Pluton security processor. Brian Krzanich, the then Intel CEO, told them to pound sand. So Microsoft went to Qualcomm for this solution given Qualcomm, like Apple, was ARM-based. Given Qualcomm’s smartphone and tablet focus, they also were focused where Microsoft wanted them to be on energy efficiency.
This highlighted that when it comes to PCs, Microsoft calls the shots, not the chip vendor, and it is now aggressively promoting and protecting Qualcomm with this initial offering, and the Snapdragon X Elite is an impressive part.
Lunar Lake
Pat Gelsinger now runs Intel. He immediately saw how badly Intel was exposed and pivoted the company aggressively to address this threat. Intel’s people pulled off the impossible and brought out in 2024 the technology that was expected in 2026. The project, code named Lunar Lake, is now due to market in the 2024 back-to-school timeframe.
Like most advanced technology products, Lunar Lake is expected to be a premium offering and cost more than Snapdragon X products. On paper (we won’t have final testing until the Lunar Lake laptops show up), it should have significantly higher performance than the Snapdragon X Elite.
And given we won’t really have workstation or desktop products out that support Copilot+ until well after 2024 (which seems odd because developers are considered a primary audience for Microsoft and yet seem to have been forgotten during this cycle), the Lunar Lake offering may constitute the closest thing to a workstation laptop until Microsoft blesses GPUs as good alternatives to NPUs for desktop configurations.
What is interesting is that Qualcomm’s Snapdragon X Elite development kit has become the stealth desktop offering for those wanting more of a workstation/desktop solution, suggesting that OEMs are missing a big potential opportunity by not licensing this configuration for small form factor PCs and AI focused workstations until an x86 solution could be spun up.
Wrapping Up: Products to Look For
While the Intel-based laptops won’t show up until late August or September, the Snapdragon X Elite products are ready to order. Picking between them can be difficult, but Qualcomm’s other advantage is with modems, so the best of this initial group will have both the Snapdragon X Elite processor and the latest Qualcomm 5G modems. They are the Dell Latitude 7455, the Lenovo ThinkPad T14S, and the most Apple-like product, the Microsoft Surface Pro.
Qualcomm has another potential advantage and that is its potential ability to better assure a consistent AI experience across both PC and smartphone platforms and to better integrate the two systems. These two advantages haven’t emerged yet but could be used to better defend the market share Qualcomm gets before AMD and Intel can get their Copilot+ solutions to market.
Given Qualcomm’s smartphone position, it is even more likely that the eventual AI client, which could be different than both smartphones or PCs, will come from them because that device will need to be as mobile as a smartphone and likely use a voice interface and a head-mounted display with an AI operating system that could even put Windows at risk.
It is going to be an interesting summer.
