Investors familiar with the computing landscape know that until the mobile revolution hit, led by Apple and Google (GOOG 0.92%), the only mainstream way to access the Internet and do day-to-day computing tasks was to buy a PC equipped with Microsoft's (MSFT +1.32%) Windows and, most likely, an Intel (INTC 5.25%) processor. However, both Intel and Microsoft were thoroughly disrupted from below by the rise of smartphones and tablets, and both are now working feverishly to recover from what appears to be a major mistake. While Microsoft's strategy seems fragmented (Does it want to be an ecosystem partner, or a hardware vendor?), Intel's strategy is clear -- get its silicon into as many of these devices as possible.
At its developer forum, Intel was gaga for Google
At the Intel Developer Forum in San Francisco, the company spent a good deal of time talking up its Android push. I don't mean just during the keynote at which Google and Intel jointly announced a suite of Chromebooks (as well as an apparently mutual pledge to continue to support each other's corporate ambitions), but during the technical sessions targeted at software developers.
Intel has been working on providing an increasingly rich suite of software tools to enable developers to not only feel at home on Android, but to feel that Intel's hardware and software will deliver the best Android experience. I know that sounds like a rather lofty proposition, particularly as heavyweights such as Qualcomm and NVIDIA have shipped far more software and silicon into Android-powered devices than Intel has to date, but Intel's software and hardware expertise make it a competitor too powerful to ignore.
Expect to see Atom-powered Android devices late this year
Intel's next-generation tablet chip family, known as the Atom Z3000 series, is scheduled to show up in devices at the Windows 8.1 launch in October. However, my conversations with Intel personnel make me confident that there will be Intel-powered Android devices available based on this new chip family by the time the year is out, although certainly later than the Windows-based devices.
However, despite the fact that the Android software stack is taking a bit longer to get fully optimized for the Z3000 chips (Intel has much more experience with Windows than with Android), the prototypes that I got to play with at IDF were quite nice. The popular 3D benchmark "Epic Citadel" ran smoothly even at an incredible 2,560-by-1,440 resolution. The user interface was very snappy, and web-surfing was silky smooth.
What about Microsoft, though?
Interestingly enough, while the vast majority of Intel's revenue is dependent on Windows, I get the sense that the Intel-Microsoft relationship is strained, to say the least. It's bad enough that many people seem to believe that Windows 8 had a detrimental effect on PC sales, but the fact that Microsoft has been promoting the ARM-centric Windows RT pretty heavily (despite its commercial failure) likely doesn't sit well with the chip giant.
Also, keep in mind that the vast majority of non-Apple tablets sold today are Android-based, so it wouldn't be smart for a chip company starved for growth to lock itself out of a very substantial growth market (particularly as its core PC market seems to be in decline). I expect that the Intel/Microsoft relationship will mend itself over time, especially if a new CEO decides to cut back on the Windows RT promotion and if Windows 8.1 shows some signs of life. But for now, Intel needs to focus on what it does best: building the best chips for every system that it can.
The Foolish bottom line
The good news for Intel investors is that the company is taking Android very seriously. While Intel's primary focus with respect to Android is on tablets and smartphones, Intel has even begun to talk up all-in-one, low-cost PCs that run Android to target emerging markets. The long-term vision, it seems, is that the computing continuum will be dominated by both the Windows and Android ecosystems, and Intel is poised to be a major chip supplier for both ecosystems, winning no matter which software giant is on top.
