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Analyst identifies 'widening rift' in Microsoft-Intel alliance

It isn't news that the historic "Wintel" duopoly has been taken down a peg in recent years by the onslaught of smartphones and tablets. But the willingness of Intel and Microsoft to work together is also fraying as each company increasingly adopts strategies "that work against each other's interests," according to IHS iSuppli analyst Craig Stice.

Stice makes his case in a report issued by the research firm earlier this week.

"Microsoft and Intel once marched shoulder to shoulder, dominating the PC market with their closely tied operating system and microprocessor technologies," the researcher said in a press release announcing the publication of the IHS iSuppli DRAM Dynamics Report.

The strategy held up for the two allies for over a decade but began to change in visible ways during the mobile era, Stice contended. This despite surface appearances that indicate that the once-mighty Wintel is actually still pretty mighty.

But going forward and, if current trends hold, both Microsoft and Intel stand to lose a good deal of their market share in operating systems and microprocessors, the analyst claimed.

"Despite a flurry of activities to adjust to the changed realities of the technology industry, Wintel is expected to suffer a declining share of the 'new' computer market, a category consisting not just of PCs but also of the much faster-growing smartphone and media tablet segments," the research firm said.

Microsoft had a 44 per cent share of the OS market for PCs, tablets, and smartphones in 2011, according to IHS iSuppli. That could slip to just 33 per cent in 2016, the research firm predicted. Intel's projected market share decline over that same period follows a similar line - from 41 per cent of the global microprocessor market to 29 per cent, according to IHS iSuppli.

If such a market share decline for Wintel does come to pass, however, it might not actually affect the numbers of units shipped by the two tech giants very much. For example, IHS iSuppli forecast that "the total size of the [microprocessor] market will double from 2011 to 2016," meaning Intel could lose a lot of the market share and still end up moving more chips than ever.

But the influence of Wintel would surely suffer a blow if its control of the computing market is indeed diminished to the extent that Stice and IHS iSuppli believe it will be - and that's the key here.

"In the PC segment, Wintel extracted the majority of the profits, controlled every move and compelled all other players to either comply or risk being forced out of the game. While still an overwhelming influence in their respective markets, the tables have turned for Microsoft and Intel," Stice said.

"With smartphones and tablets performing tasks previously exclusive to PCs, the computer market has expanded to include other platforms. As a result, Wintel finds itself in the unfamiliar position of dancing to somebody else's tune, following standards that were set by other companies for form factors, user interfaces, and even pricing. This means Microsoft and Intel must think outside the box - even if it means adopting strategies that work against each other's interests."

That's already happening. After all, Windows RT and Intel-powered Android phones didn't just emerge from a vacuum.