There's definitely one thing Microsoft (Nasdaq: MSFT) is doing right with how it's structuring the launch of Windows 8 this year: keeping its hardware partner list rather short. In doing so, it has tighter quality control over who makes what, instead of the open free-for-all that plagued Google Android tablets initially.
Windows RT, the flavor compatible with ARM Holdings-based chipsets, will have more combinations of chipmakers and OEMs relative to the Intel camp. Microsoft has tapped three ARM players specifically: Qualcomm (Nasdaq: QCOM), NVIDIA (Nasdaq: NVDA), and Texas Instruments (NYSE: TXN).
Pick a partner
The software giant has imposed restrictions on these chipmakers in that each can only select up to two hardware OEM partners. Think of it like a big multibillion-dollar round of polygamous speed dating. Here are some of the initial rumored matches made in Redmond, according to a report from China Times.
|
Chipmaker |
NVIDIA |
Qualcomm |
Texas Instruments |
|---|---|---|---|
| OEM No. 1 | Asus | Samsung | Toshiba |
| OEM No. 2 | Lenovo | Hewlett-Packard (NYSE: HPQ) |
Source: China Times.
That was just the first round, though, and HP has since decided to pull out of the early batch of Windows RT tablets in favor of sticking with a more traditional Intel flavor with Windows 8. Some have attributed this decision to Microsoft's own direct entry into first-party tablet hardware with its Surface tablet. Dell is supposedly eyeing HP's empty seat and wants in on the ground floor of Windows RT.
Winners and losers
Looking at this potential lineup, a few combinations look much more promising than others.
The NVIDIA and Asus hookup is the most promising to me. This dynamic duo also happens to be behind Google's Nexus 7, which is sold out just about everywhere. NVIDIA's quad-core Tegra 3 has begun to gain a lot of traction in tablets, which is thanks to three key factors: The Tegra 3 is unaffected by the 28-nanometer supply constraints afflicting the industry, NVIDIA's graphics specialties come in handy for tablet gaming, and Qualcomm's cellular-integration advantages are less important in tablets. Asus is also known for quality hardware, so my money would be on this pair in this race.
Qualcomm and Samsung are both renowned for incredible success in smartphones. This pair has fewer stripes in tablets, with most recent tablets sporting Tegra 3 chips, and Samsung's Galaxy Tabs aren't selling nearly as well as its Galaxy S smartphones. The domestic variant of Samsung's latest Galaxy S III flagship carries a Qualcomm Snapdragon S4. Whether or not Qualcomm and Samsung can translate these successes into a compelling Windows RT tablet remains to be seen, but they have a good shot.
TI and Toshiba are dead in the water. Neither company has promising prospects in the tablet market. TI was able to score the initial win in Amazon.com's first-generation Kindle Fire, but that was probably due to the similarities the device shares with Research In Motion's PlayBook since design and production was outsourced to Quanta in an effort to get it to market as quickly as possible. Both the PlayBook and Kindle Fire were made by Quanta and carry TI OMAP chips. One sells very well, the other not so much. More importantly, Amazon is expected to go with NVIDIA's Tegra 3 in its Kindle Fire 2, so TI has seemingly lost that spot. TI hasn't scored any major wins recently. Toshiba is also a non-player in the tablet market. When was the last time you saw someone using a Toshiba Thrive, assuming you've even heard of it? TI and Toshiba have no chance.
Lenovo, HP, and Dell have all twiddled their thumbs on tablets, so I wouldn't expect any big surprises from any of them. You might think HP and Dell may perform well as the largest domestic PC makers, but remember that they continue to lose PC market share to Asian players and both companies have previously failed in their respective attempts -- the TouchPad and Streak -- to tap the tablet market.
Winner, winner, chicken dinner
These OEM partner restrictions are expected to be lifted in January, after the first batch of tablets finds its way to market in time for the holiday shopping season. At that point, you can expect to see more players jump in.
If I were a gambling man, I'd bet on NVIDIA and Asus in the Windows RT camp.
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