Please ensure Javascript is enabled for purposes of website accessibility

Microsoft Corporation Is Trying to Resurrect Windows-on-ARM

By Ashraf Eassa – May 3, 2017 at 11:30AM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Could it be different this time?

A long time ago in a galaxy far, far away, Microsoft (MSFT -0.97%) and a handful of ARM-based chipmakers made a big deal about an operating system dubbed Windows RT. Windows RT was a version of Microsoft's Windows operating system designed to run on processors that implement the ARM instruction set architecture, rather than on Intel's (INTC -1.66%) x86 architecture.

The reason that Windows RT was such a colossal flop was simple: Systems running Windows RT couldn't run software designed for traditional Windows, since that software also needed Intel x86-based processors to run properly.

Microsoft's Surface Studio.

Image source: Microsoft.

Yesterday, at an education-focused event, Microsoft introduced a new flavor of Windows 10 known as Windows 10 S, which has been described as a competitor to Alphabet's (GOOG 0.02%) (GOOGL -0.01%) Google Chrome OS.

Windows 10 S differs from standard Windows 10, per Ars Technica, in that it "can only run and install applications that are obtained through the Windows Store."

"Both applications [that] are built using Microsoft's new Universal Windows Program (UWP) framework, and traditional Win32 applications ported to the Store using the Desktop Bridge (formerly known as "Project Centennial") will be permitted, but Win32 applications that use their own installers will not function," Ars Technica explains.

It seems to me that this is Microsoft's way of paving the way for wider adoption of ARM-based processors on the Windows platform, since restricting the kinds of applications that will work in Windows 10 S in this fashion means that ARM-based chips shouldn't be at a disadvantage in terms of compatibility to Intel x86-based ones.

Winners and losers

Obviously if Windows 10 S allows Microsoft and its partners to bring down system price points to make them more competitive with Chrome-based devices, then that'd be a clear win for Microsoft. I don't see Windows 10 S-based computers substantially cannibalizing sales of full-fat Windows 10-based systems, so I see this more as Microsoft defending itself against Chrome-based systems (halting or even reversing share loss in certain segments).

Other potential winners include ARM-based chip makers, such as Qualcomm (QCOM 0.31%), that now can sell processors into such systems.

The loser, of course, would be chipmaker Intel (INTC -1.66%), which sells the clear majority of chips into notebook computers today. To the extent that ARM-based vendors can win designs, Intel stands to lose unit and revenue share.

A similar argument could have been made for Chromebooks, which enabled fundamentally the same thing that Windows 10 S aims to -- the viability of ARM-based systems. However, Intel wound up gobbling up the bulk of Chromebook processor market share, leaving only scraps for the ARM-based vendors to split.

Strategy for Qualcomm and Intel

I think that the two main suppliers of processors into Windows 10 S-based computers will be Intel and Qualcomm, as these are the two companies large enough with the resources to develop and support Windows-compatible platforms.

I suspect that Intel's existing supply chain relationships with the major PC vendors will help it maintain a high level of share within Windows 10 S-based devices (I think said relationships helped immensely in allowing Intel to capture significant Chrome OS share).

At the same time, though, if Intel can't deliver competitive low-power, low-cost products (via its Atom line), that could give Qualcomm a window of opportunity. Qualcomm, for example, has the advantage of higher levels of chip integration (particularly when it comes to connectivity technologies like Wi-Fi and 4G LTE) over Intel.

It'll be interesting to see how this all plays out.

Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. Teresa Kersten is an employee of LinkedIn and is a member of The Motley Fool's board of directors. LinkedIn is owned by Microsoft. Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Qualcomm. The Motley Fool recommends Intel. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Microsoft Corporation Stock Quote
Microsoft Corporation
$246.79 (-0.97%) $-2.41
QUALCOMM Incorporated Stock Quote
QUALCOMM Incorporated
$125.28 (0.31%) $0.39
Alphabet Inc. Stock Quote
Alphabet Inc.
$101.42 (-0.01%) $0.01
Intel Corporation Stock Quote
Intel Corporation
$27.18 (-1.66%) $0.46
Alphabet Inc. Stock Quote
Alphabet Inc.
$102.24 (0.02%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/07/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.