Will Microsoft’s Surface Mini Leave Intel in the Cold?

Microsoft is allegedly planning on releasing a Surface Mini at a May 20 unveiling. Will Intel be a part of this, or will Microsoft leave Intel out in the cold?

May 8, 2014 at 3:52PM

It's pretty obvious that, during the last several years, Microsoft (NASDAQ:MSFT) and Intel (NASDAQ:INTC) have seen their relationship erode quite substantially. Indeed, it seems that with Microsoft's continued pushing of its ARM (NASDAQ:ARMH)-based Windows RT operating system in its flagship line of Surface products, as well as its close ties with Qualcomm (NASDAQ:QCOM) on Windows Phone, Intel has become a second-class citizen to Microsoft. Will Microsoft keep trying to shut Intel out with its upcoming Surface Mini?

The Windows RT move -- it originally made sense
At the 2011 Consumer Electronics Show, or CES, Microsoft announced Windows RT, which meant support for ARM architecture processors. Back then, Microsoft seemed to sanction support for chips from Qualcomm, Texas Instruments, and NVIDIA. The idea here was that the next generation of Windows -- which was meant to extend to tablets -- would run on a broad range of SoCs from a number of vendors.

Hardware

Microsoft's Surface 2. Powered by Windows RT and an NVIDIA Tegra 4. Source: Microsoft. 

At first, this move made perfect sense. At the time, Intel was still goofing around with abominations like Moorestown that offered neither the integration nor the performance/power to really be competitive in the tablet market as we know it, so Microsoft needed chip vendors that could deliver competitive product on time. Porting Windows to ARM, quite frankly, made perfect sense at the time, given Intel's apparent rank incompetence at producing competitive mobile chips.

Clover Trail changed the game -- Bay Trail ended it
While Windows RT made sense for tablets when Intel appeared to not be able to design a mobile chip to save its life, the launch of Intel's Clover Trail -- a low power, highly integrated SoC for tablets -- really put that argument to bed. It offered superior CPU performance to the Qualcomm Snapdragon and NVIDIA Tegra 3 that were available for Windows RT at the time (although it did lag on graphics), and offered extremely competitive power consumption.

Bay

Source: Intel. 

Following Clover Trail, Intel launched Bay Trail-T, which once again offered leadership CPU performance and offered graphics performance that was within the same ballpark as the best ARM-based products --  although, yes, Qualcomm and NVIDIA did offer superior graphics performance in Snapdragon 800/Tegra 4, respectively. More importantly, the Bay Trail-T offers full compatibility with full Windows 8.1 rather than Windows RT, which cannot run the millions of traditional Windows programs.

Microsoft keeps pushing RT, but will Surface Mini bring Intel closer?
Microsoft is hosting an event on May 20 at which it is reportedly launching a Surface Mini. This tablet is expected to pack Qualcomm silicon which, of course, implies that it will be running Windows RT and not Windows 8.1. Interestingly, the sources that claim that Qualcomm will power the Surface Mini also claim that Intel will be "participating" in the May 20 rollout.

This may mean that Microsoft is planning two models, perhaps a Surface Mini and Surface Mini Pro, the former powered by Qualcomm/Windows RT and the latter powered by Intel/Windows 8.1. If this is true, then this would signal that, perhaps the relationship between Microsoft and Intel isn't as bad as the company's prior aggressive marketing of Windows RT/Surface RT would have suggested.

Foolish bottom line
The development of Windows RT made sense back in the day -- Intel didn't have the right silicon for a mobile world. However, now that Intel is competitive in tablets and offers full Windows 8.1 application compatibility, it seems like a no-brainer for Microsoft to cool its jets on Windows RT and start promoting full Windows 8.1 (and successor) products with full X86 chips (i.e. Intel). We'll see at the Surface Mini launch whether the Intel/Microsoft relationship has been mended to any degree depending on what platform and silicon choices Microsoft makes for whatever it rolls out. 

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Ashraf Eassa owns shares of ARM Holdings and Intel. The Motley Fool recommends Intel and Nvidia. The Motley Fool owns shares of Intel, Microsoft, and Qualcomm. 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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