Did Intel Just Secretly Bash Microsoft's Next Big Thing?

For decades, Microsoft (Nasdaq: MSFT  ) and Intel (Nasdaq: INTC  ) have been like two peas in a computing pod, forming the nearly unstoppable force that was WinTel. The two companies are both relying heavily on the software giant's Windows 8 operating system to spark sluggish PC sales when it's released in almost exactly one month.

Just this month, Intel had to cut its third-quarter guidance amid a "challenging macroeconomic environment." Translation: PC sales are stinking it up. Considering its outlook, there's a good chance Intel won't put up revenue growth this year.

According to a recent Bloomberg report, Intel CEO Paul Otellini said at an internal meeting in Taipei that Windows 8 isn't ready yet and that the OS is plagued by bugs. Furthermore, Otellini says Microsoft knows this -- but is proceeding with the scheduled launch anyway. On the other hand, he then backed Mr. Softy's decision and thinks that releasing it before it's had all the finishing touches put on is the right thing to do. Wait, what?

The reasoning goes that since software is easily updatable after the fact, Microsoft is right to push forward in order to get Windows 8 out the door and then circle back and patch any holes it needs to. It's not uncommon for software makers to quickly release updates after an initial product launch to address vulnerabilities or other issues that might be discovered. For example, Apple (Nasdaq: AAPL  ) has already issued two maintenance updates to the latest version of its desktop operating system, OS X Mountain Lion, since its release in July.

Many of Microsoft's hardware partners have their hands on Windows 8 already and are diligently working to prepare the next generation of devices. However, some analysts question whether or not the OEMs will have sufficient time to marry the hardware and software in a cohesive manner. Among these new devices will be tablets with high hopes of challenging the iPad and granting both Microsoft and Intel entry into that booming market.

If we're just talking about some minor glitches that the average user won't notice and can be quickly fixed, then no harm, no foul. But if we're talking about bugs that jeopardize the overall user experience, Windows 8 might not have much of a chance.

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Evan Niu, CFA, owns shares of Apple. The Motley Fool owns shares of Apple, Intel, and Microsoft. Motley Fool newsletter services recommend Apple and Intel. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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  • Report this Comment On September 26, 2012, at 9:47 PM, snommis69 wrote:

    Nothing new - every other Microsoft OS is solid. 98, 2K, XP, 7....

  • Report this Comment On September 27, 2012, at 11:06 AM, lucasmonger wrote:

    You don't have to be the CEO of Intel to be able to make those statements. Every software company has to balance market timing vs. software quality vs. customer experience. If they release too early with too many bugs you get irate customers (Windows Vista, Microkia Lumia 900 1st week bug). If you ship too late, you the competition gets you (Windows Phone 7 vs. Android or IOS).

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