Friday, August 19, 2011

Has "Wintel" been replaced by "Quadroid"?

A case can be made for it. First, the Wintel monopoly is dying off, ironically from it's own practices:

HP is Wintel's latest victim
NEW YORK (CNNMoney) -- For nearly three decades, personal computer makers thrived by building their PCs around two key ingredients: Intel chips and Microsoft Windows.

It's an unprecedented success streak in the fast-changing tech market, where new technologies displace old ones in an eyeblink. But now, it looks like the "Wintel" party is finally winding down.


"The tablet effect is real," HP CEO Leo Apotheker said Thursday on a conference call with analysts. "Consumers are changing how they use PCs."

In the new "post-PC" era, razor-thin profits are no longer attractive.

"The PC business only returns a few points of margin. HP is really good, and they only return 5%," said Martin Reynolds, analyst at Gartner. "Staying in the PC business is relatively risky. Who knows where these things will go over the next few years?"


"I think what we're seeing -- what HP's move is really about -- is the aftermath of the Wintel strategy, in which you give all the profits to Intel and Microsoft," said Carl Howe, analyst at Yankee Group.

While companies like HP and Dell are getting by with single-digit margins in their PC businesses, Microsoft (MSFT, Fortune 500) is the fourth-most profitable company in the Fortune 500. Intel (INTC, Fortune 500) is 14th.

"Guess what? That model is driving them all out of business," Howe continued. "It has made companies like Apple look really smart. Wintel is falling apart."

HP would follow IBM's exit of the PC market -- albeit seven years later.

IBM's move is looking more and more prescient: When it sold its iconic PC business to Lenovo in 2004, IBM (IBM, Fortune 500) said it believed the PC market was commoditizing. It didn't want to play in a market with so little upside.

Even Microsoft appreciates the changing tide. It's planning for the post-PC era by developing a new version of Windows for tablet PCs, running on mobile chips designed by British company ARM (ARMH). That's also why it's fighting so hard to make Windows Phone work: Microsoft realizes it can't afford to be left out of the computing platform of the future.

So if we're really witnessing the "final collapse of the Silicon Valley PC era," as Howe suggested, who's next to go? [...]

Read the whole thing to find out. But don't just look at who's next to go; consider also, perhaps more importantly, who's next to come, and why:

Android and Qualcomm are the new Wintel
NEW YORK ( -- Google's Android mobile operating system has been credited with saving struggling handset manufacturers, but it may ultimately be the thing that kills a number of them off.

Before Android came around, mobile devices typically had hardware integrated with custom operating software, which differentiated LG phones from Samsung phones from Motorola phones, and so on. No two devices from rival manufacturers were at all alike.

But now, for the first time ever in the wireless ecosystem, a standard platform is emerging: At least a dozen handset makers have brought to market more than 90 different smartphones that run Android, and more than three quarters of those handsets have Qualcomm chips embedded in them, according to a new study by consultancy PRTM.

The Qualcomm-Android standard, or "Quadroid" as PRTM calls it, is becoming a parallel to the Windows-Intel, or "Wintel," standard that developed in the 1990s.

Like with Wintel PCs, Quadroid devices' software and hardware is essentially a commodity -- they're very similar on every phone, making differentiation a difficult task. Form factor is still a battleground -- some people want keyboards, some don't -- but drop past the top-tier of the very newest devices and the distinctions are tiny. Kickstands, dual screens, very high resolution cameras and OLED touchscreens are among the features Quadroid smartphone makers are using to set themselves apart.

It was a problem that Wintel PC companies tried to solve -- mostly unsuccessfully -- with customizability (Dell), unique design (Alienware), and cow-print boxes (Gateway).

But Quadroid has an added wrinkle: Android is open source, meaning it's free for device manufacturers to use and manipulate. That makes the barrier to entry almost nil, opening the door to a number of no-name manufacturers to produce smartphones that compete with the big guys. Two years ago, no one had heard of HTC or Kyocera, LG had virtually no smartphone presence, and Motorola (MOT, Fortune 500) had been left for dead. Now they're at the industry's vanguard. [...]

So a whole bunch of new players have jumped in and are at the head of the new trends, where Microsoft and Intel have not been able to go... yet. They are rushing to catch up and cash in. Will they make it? Will the competition they face produce better products? And will it all end up again being just a few major companies dominating everything in the end? We shall see.

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