Track the companies that matter to you. It's FREE! Click one of these fan favorites to get started: Apple; Google; Ford.



Microsoft Better Have Big Plans for ARM

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Is Microsoft (Nasdaq: MSFT  ) finally starting to get it when it comes to portable and mobile devices? For the first time in a long time, there are reasons to be encouraged.

Smart decisions
First, there was the recent management shakeup inside Microsoft's Entertainment and Devices division, which covers everything from its successful Xbox 360 console to its, ahem, less successful Zune media players and Windows Mobile smartphone operating system. Voluntarily or not (depends who you ask), division President Robbie Bach and Chief Technology Officer J Allard have left the division.

Then, following Bach and Allard's departures, there was the canceling of Microsoft's ill-conceived Kin social-networking phone project. Between the platform's limited feature set – Kin phones can't run third-party apps -- and its fragmenting of Microsoft's mobile efforts -- the Kin project was a pretty questionable initiative from the start. If nothing else, Microsoft deserves credit for pulling the plug on Kin once initial sales, as many predicted, proved terrible.

And now we have news that Microsoft has acquired a license from ARM Holdings (Nasdaq: ARMH  ) , whose processor cores go into the chips that power most of the world's cell phones, as well as billions of other devices. What's more, Microsoft's ARM license isn't a conventional one, which involves the right to use microprocessor cores that ARM's already developed, but rather a more costly "microarchitecture" license that lets Microsoft develop its own processor cores based on ARM's technology.

Thus far, ARM's only given out a handful of microarchitecture licenses, with some prominent names being Qualcomm (Nasdaq: QCOM  ) , which designed its own ARM cores for the Snapdragon chips often found in high-end Google (Nasdaq: GOOG  ) Android phones, and Marvell Technology (Nasdaq: MRVL  ) , whose application processors are based on proprietary ARM cores. And interestingly enough, another microarchitecture licensee is Samsung, the manufacturer of the energy-efficient Apple A4 chip (features a modified ARM Cortex-A8 core) that goes into the iPad and iPhone 4.

Countering the iPhone and iPad
The bottom line is that you don't get an ARM microarchitecture license unless you have some major plans for it. And this would sure be a good time for Microsoft to have some big plans for creating low-power ARM chips. Apple's (Nasdaq: AAPL  ) proprietary A4 is a key reason why the iPhone 4's battery life is superior to that of any high-end Android phone -- and will likely be better than that of the first phones based on Microsoft's upcoming Windows Phone 7 operating system. A custom ARM core might be what's needed for Microsoft to stay competitive on the battery-life front.

But a bigger concern for Microsoft, without a doubt, has to be how much thinner, lighter, and less power-hungry the A4-powered iPad is than just about any netbook running Windows. The iPad is in prime position to take a big chunk out of the netbook market, and a successful Microsoft response will require big changes in hardware as well as software. Future Microsoft netbooks and tablets will need to eschew the relatively power-hungry Intel (Nasdaq: INTC  ) Atom chips that go into current Windows netbooks in favor of ARM-based silicon that's not only more power-efficient, but also lends itself to thin and light Internet appliances like the iPad.

Will Microsoft succeed in righting its ship? I'd say that there are still a lot of big question marks. But thanks to recent moves, there are at least reasons for investors to think that Mr. Softy is no longer asleep at the wheel.

Fool contributor Eric Jhonsa has no position in any of the companies mentioned. Intel and Microsoft are Motley Fool Inside Value selections. Google is a Motley Fool Rule Breakers recommendation. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended buying calls on Intel. Motley Fool Options has recommended a diagonal call position on Microsoft. The Fool owns shares of Google and Intel. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (7)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On July 26, 2010, at 6:47 PM, FreeRange1 wrote:

    Why in the world would you think that msft even has a chance of doing this right? They have not been able to successfully enter the hardware side of the business and there is no reason to think they can now either. Further, their software solutions, outside of enterprise, have been a disaster, especially in tablets and mobile. And even some enterprise level solutions, think Vista. Some point to the "success" of the xbox, but once again, this is a product that has lost BILLIONS of dollars, and has been plagued by disastrous hardware flaws.

  • Report this Comment On July 26, 2010, at 6:53 PM, bsimpsen wrote:

    Without some additional differentiator, such as PA Semi or Intrinsity, Microsoft will find itself with ARM hardware that's no better than anyone else's. This might be a step in the right direction, but it is not without peril.

  • Report this Comment On August 09, 2010, at 10:41 AM, jrmart wrote:

    It is all about low power chips. Just look at Apple's A4 chip that they jointly developed with ARM. It can run the IPAD all day on a single charge.

    I think it would make a lot of sense for Apple to buy ARM just to get their patents and ARM's talented design team.

Add your comment.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1246729, ~/Articles/ArticleHandler.aspx, 10/26/2016 4:09:32 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 6 hours ago Sponsored by:
DOW 18,169.27 -53.76 -0.30%
S&P 500 2,143.16 -8.17 -0.38%
NASD 5,283.40 -26.43 -0.50%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

10/25/2016 4:00 PM
AAPL $118.25 Up +0.60 +0.51%
Apple CAPS Rating: ****
ARMH $0.00 Down +0.00 +0.00%
ARM Holdings CAPS Rating: ***
GOOGL $828.55 Down -7.19 -0.86%
Alphabet (A shares… CAPS Rating: *****
INTC $35.10 Down -0.16 -0.45%
Intel CAPS Rating: ****
MRVL $13.16 Up +0.09 +0.69%
Marvell Technology… CAPS Rating: ****
MSFT $60.99 Down -0.01 -0.02%
Microsoft CAPS Rating: ****
QCOM $67.71 Down -0.35 -0.51%
Qualcomm CAPS Rating: ****