Microsoft and Qualcomm Team Up on Tablets

Microsoft Corp. is working with Qualcomm Inc. to spawn a new breed of tablets and notebooks that promise to diversify the software giant's technology base and give the chip maker access to new markets. The partnership will result in an update of Windows 10 that runs on a chip in Qualcomm's widely used Snapdragon line of processors, the first Windows 10-Snapdragon pairing.

However, those devices may not be able to handle every application developed for the company's flagship operating system—recalling a blunder from a few years ago, when Microsoft rolled out a Windows variant that ran on mobile-friendly chips but wasn't compatible with some Windows applications.

The collaboration, to be announced Thursday at the WinHEC hardware developer conference in Shenzhen, China, is meant to encourage hardware makers to build lightweight Windows devices that, unlike most tablets and laptops, have a cellular modem built-in. That means users will be able to connect to cell networks smartphone-style, without the need for additional hardware, Microsoft said. In addition, the devices will offer longer battery life than most laptops.

Windows 10 is being adapted to run Qualcomm's forthcoming Snapdragon 835. That chip is widely expected to be used in smartphones, a market in which Microsoft has struggled. Terry Myerson, executive vice president of the Windows and Devices Group, didn't mention smartphones in a blog post announcing the news.

Qualcomm said in a statement that the first Windows 10 devices using its chip will be "commercially available in the second half of 2017."

Nearly all versions of Windows run on chips that use technology developed by Intel Corp., a longtime partner that is announcing its own collaboration with Microsoft at WinHEC. Qualcomm's Snapdragons use technology from ARM Holdings, which last summer was acquired by SoftBank Group Corp. for $32 billion. Collaborating with Qualcomm gives Microsoft an alternative supplier of chips that run its operating system and a new source of semiconductor innovation, as well as a beachhead in ARM-based devices.

For Qualcomm, the biggest maker of chips for smartphones, the partnership offers a new pathway into the tablets and laptops that have been an Intel stronghold. Those devices, though they sell in smaller volumes than phones, still represent a lucrative market—particularly the high-priced mobile computers purchased by many companies for their workers. The ability to run Windows 10 also will also bring compability with applications developed for PCs that hadn't previously worked on Qualcomm-powered hardware.

Microsoft's collaboration with Qualcomm isn't the software giant's first stab at running Windows on ARM processors. Microsoft introduced a previous ARM-compatible version, Windows RT, in 2012, but scuttled it three years later. Hardware makers shied away from making Windows RT devices, in part because of competition from Microsoft's own initial Surface tablet, which ran the Windows variant. Critics panned Windows RT because it didn't run applications developed for earlier versions of Windows.

Poor sales of Surface RT devices led Microsoft to take a $900 million charge in July 2013.

Microsoft said it would use so-called emulation technology to address the compatibility issue. The company expects the "overwhelming majority" of applications written for Windows PCs to run on the new Snapdragon-powered devices, a Microsoft spokesman said.

"Older apps that run under emulation will work great," at speeds similar to their performance on similarly-priced PCs, the spokesman said in an emailed statement.

But Microsoft's past stumble left Forrester Research Inc. analyst J.P. Gownder wary.

"Microsoft is going to get hammered on the ARM announcement if they don't do it right," Mr. Gownder said. "They are bringing back the ghosts of the RT experience."

If Microsoft is successful, though, it could make Windows tablets and notebooks more competitive with Apple Inc.'s iPad Pro. It could even lead to new mobile computing form factors, he said.

Another question is whether Windows 10 will work with ARM chips made by companies other than Qualcomm. Pat Moorhead, an analyst at Moor Insights & Strategy, said that is likely to happen, but it may require a bit more programming work by Microsoft or its partners.

Microsoft declined to comment on the topic of other ARM chips.

At WinHEC, Microsoft also plans to strengthen its position in augment reality and virtual reality. Its HoloLens headset delivers augmented reality, superimposing digitally generated visual elements on the user's view of the physical world. VR initiatives by Alphabet Inc., Facebook Inc. and others, on the other hand, immerse users in digitally generated sights and sounds.

Microsoft wants a piece of both areas. It plans to announce that it has submitted Microsoft HoloLens for government approval in China, hoping to offer the device to developers there in the first half of 2017.

The company also will announce that Chinese manufacturer 3Glasses plans to launch a VR headset that runs Windows. 3Glasses joins HP Inc., Dell Inc., Lenovo Group Ltd., Acer Inc. and Asustek Computer Inc., whose plans to offer Windows-based headsets were announced in October.

Microsoft's new partnership with Intel, dubbed Project EVO, will focus on VR enhancements for PCs including support for a new headset design announced by Intel last summer, Intel said.

Write to Jay Greene at [e-mail] and Don Clark at [e-mail]

(END) Dow Jones Newswires

December 08, 2016 03:45 ET (08:45 GMT)

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