Intel Buys Way into Tablets While $99 may be Microsoft Sweet Spot

Rich Tehrani : Communications and Technology Blog - Tehrani.com
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Intel Buys Way into Tablets While $99 may be Microsoft Sweet Spot

Intel recently reported earnings and the takeaway is the company is going to focus more on Android and ramp up subsidies to get into more OEM tablet designs in Asia and elsewhere.

Intel said that its Windows tablets are shipping in numbers which barely register in their quarterly numbers. Obviously this isn't a positive development. To put this in perspective, out of the five-million processors the chip behemoth shipped for tablets, as little as 10% were for Windows. It seems many analysts are convinced that for Windows devices to be successful, they need keyboards and to some extent this makes sense as tablets are typically described as consumption devices. But with software like Microsoft Word now running on iOS, this paradigm is set to change. Expect the development to put even more pressure on the Windows franchise.

As I mentioned at the top, expect Intel to increase the subsidies it pays out to get its chips in more tablets... It wants to hit 40 million this year from the current five-million it enjoyed in Q1. It beleives its Broadwell chip with greater efficiency and higher performance graphics as well as its entry-level SoFIA chips will aid in this goal. Other interesting tidbits are the first Android-based tablet running Intel's Bay Trail processor will be shipping soon and the company believes Windows will eventually gain traction in the tablet space.

You will see articles like this one and another trying to read into Intel's comments by describing it as a split between Microsoft and Intel but business is business and you have to do what is best for customers and shareholders. Just as Microsoft is free to use ARM-based chips, Intel too has to make smart decisions and getting into as many Android tablets as possible is smart business.

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In the end, Windows machines are seen as commodity devices. However the challenge is the position Microsoft would have to fill in the tablet space is below Android. That is scary because you can get really no-frills Android devices for just over $50. The point, is the sweet spot for Microsoft tablets may be south of $100 which is why the good news for Redmond is Intel has even pushed the idea that a $99 tablet is in its future.


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