Forget Apple: Android, AMD Are Directly Threatened By Microsoft Surface
When it launched Windows Phone 7, Microsoft effectively put world+dog on notice that it intended to deliver its own vision for a next-generation, scalable UI. Windows 7.5 and Windows 8 extend and build on that framework. Recall that much of the negative press surrounding Windows 8 focuses on its use in a desktop environment. Switching from Desktop to Metro is still clunky and jarring.
Surface is Microsoft's hardware answer to the question "How do I shift between these different operating modes?" It delivers what the company feels are the necessary fundamentals of the PC while offering new input options (stylus or touch) and an easy, effortless way to switch from keyboard input to fingertip.
Surface is aimed at would-be tablet customers who want a Windows-compatible product that offers more tablet functionality than the upcoming crop of ultrabooks does. Apple's iPad 3 customers aren't the target -- but Android probably is. AMD, meanwhile, now has a serious problem.
The Android Angle
After the disasters of last year, OEMs are looking to Windows 8 to build momentum around tablets. Microsoft's decision to push forward with its own hardware will have seriously angered a lot of players -- but not so much that they'll fail to see the potential positive impact on their own balance sheets. Having already committed to W8 in very public ways at CES and Computex, you'll see a lot more companies hurrying to play catch-up with their own products than publicly badmouthing Microsoft.
Android is firmly established in the phone space, but it lacks a killer tablet; Kindle Fire technically uses the OS but Amazon has stripped out virtually all the identifying marks. There's rumor that Google might launch its own low-cost Android tablet but Surface, on balance, seems aimed at capturing a market point above the iPad 3's $500 stomping grounds. As such, it's in an ideal position to scuttle Android's up-market position and leave it languishing as the tablet OS of choice for cheap devices.
AMD's Krishna/Wichita Cancellation Bites Home
If Android faces a threat to one segment of its overall market, AMD is in danger of missing out on the biggest computing transformation in the past decade. We can only assume the company had good reason to kill the 28nm Krishna/Wichita cores it was building with GlobalFoundries, but that delay could prove more costly than anyone anticipated.
Microsoft has outlined plans for two devices, an Intel-powered, Retina-display equivalent and an ARM-based Windows RT device. Exact specs aren't available, but this is where AMD's 28nm SoCs could've belted one out of the park. Instead, the company had to be content with Brazos 2.0 -- a 40nm chip with a few new features, but no new architecture.
Being in at the beginning of a trend is extremely important when you're trying to establish brand strength. In the late 80s and early 90s, Intel tied AMD up in court cases over its right to make a 386 chip, then bullied OEMs into avoiding the company's hardware. By the time the Supreme Court ruled in AMD's favor, Intel had an unbeatable financial lead and a significant brand head-start.
AMD will likely counter this by partnering with an OEM or two to build Surface-like parts. It wouldn't surprise us if Microsoft ultimately licensed the Surface design to other vendors. Still, by opting for an explicitly Intel-based solution, MS has dealt Sunnyvale's aspirations a significant blow. Without a competitive design to field, AMD could end up marginalized and clinging to the bottom of the market in tablets.