[Apple Shockwave] Shaking 'Wintel' Alliance... Is MS Also Experiencing Apple Learning Effect?

The history of personal computers (PCs) can be said to have been led by the alliance of Microsoft (MS) and Intel, known as 'Wintel.' MS has been responsible for the operating system (OS), while Intel has handled the central processing unit (CPU), effectively monopolizing the market. Even Apple, which first introduced the PC, and IBM, which employed MS and Intel, collapsed before the union of these two companies. The two companies built an impregnable fortress through the DOS era and the Windows OS era. However, the cracks that gradually appeared after the advent of the smartphone era are now leading to a situation where one pillar of the alliance could change in the AI era. Some see this situation as a signal that the Apple Silicon revolution, which began when Apple ousted Intel's CPU in 2020, is now fully underway in MS's camp as well.

On May 20th, Microsoft unveiled the Surface Pro and Surface PC, which support Copilot+PC, for the first time at their event. [Image source=AFP Yonhap News]

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Recently, the US IT specialized media ZDNet titled a review article on MS's laptops and tablet PCs, 'Surface Pro' and 'Surface,' in this way. The reason for choosing this title was that the new Surface showed performance vastly different from past products. While performance improved, battery life also increased. The reason for the performance change was clear. Inside this PC was not the Intel chip previously used, but a chip manufactured by Qualcomm, well known for smartphone application processors (AP) and modems.

The Surface series is a type of MS's 'Copilot+' PC introduced for the AI era. All the first Copilot+ PCs used Qualcomm chips. Global PC manufacturers such as Samsung, HP, ASUS, Acer, and Dell all received Qualcomm chips to launch Copilot+ PCs. Currently, Intel has no share in Copilot+ PCs.

The reason is simple. Copilot+ supports AI functions on the PC alone without an internet connection. For this, an NPU (Neural Processing Unit) is required. MS set the performance level of the NPU meeting Copilot+ standards at 40 TOPS (1 TOPS equals one trillion operations per second). The NPU performance embedded in Intel's currently released CPU, 'Meteor Lake,' is up to 10 TOPS. Even combining CPU, GPU, and NPU, it only reaches 34 TOPS, falling short of Copilot+'s 40 TOPS standard.

Qualcomm's 'Snapdragon X Elite' exceeded MS's performance standard with 45 TOPS. As a result, only PCs using Qualcomm chips can bear the name Copilot+.

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◆ The attempt at change initiated by Apple, will MS follow? = In the early 1980s, after IBM introduced the PC and chose MS and Intel, the status of MS and Intel in the PC field was like a fortress. Of course, now AMD has raised its CPU market share to 20% and surpassed Intel in market capitalization, but Intel's status in sales still stands out.

Intel introduced new CPUs every time MS released a new Windows OS, achieving hits. A representative example is the Pentium. The 'Pentium,' which appeared in the Windows era, propelled Intel to become the world's largest semiconductor company.

The two companies are sometimes referred to by a single name: 'Wintel.' A portmanteau combining MS's 'Windows' and Intel's 'tel' from its name.

For the alliance to be maintained, a balance of power is necessary. If it tilts too much, the alliance cannot be sustained. This is the current situation of Wintel. From MS's perspective, change is necessary.

The decisive turning point was Apple dramatically boosting the performance of iPhones and Mac computers through its self-developed chips. In 2020, Apple abruptly opened the era of 'Apple Silicon' by using its own chips instead of Intel chips in PCs. The recently announced AI 'Apple Intelligence' is also based on Apple Silicon. Apple has proudly succeeded in becoming independent from Intel's chips.

MS has not been without such attempts. It sought change earlier than Apple by introducing ARM-based Windows, but due to the lack of sufficiently powerful chips, it was ignored by consumers.

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◆ Qualcomm's relentless efforts, will it change the 'Wintel' landscape? = The new protagonist who has captured MS's heart is Qualcomm. Qualcomm laid the foundation for growth through the commercialization of Code Division Multiple Access (CDMA) mobile communication in Korea in the 1990s and steadily sought to transition into a semiconductor company by focusing on communication modems. After the smartphone era began, it focused on transitioning to APs and emerged as the leader of the Android camp with its 'Snapdragon' chips.

Qualcomm did not stop at smartphones. When Apple entered the PC market with the M1 chip in 2020, Qualcomm acquired Nuvia, a semiconductor design company founded by former Apple employees, in 2021, laying the groundwork for entering the PC chip market. After continuous development, it introduced the PC 'Snapdragon X' based on the Orion CPU developed by Nuvia at the end of 2023. Combining AI and GPU performance prepared in the smartphone camp, a 'masterpiece' capable of competing with Apple and Intel was born. It was the emergence of a new candidate to become MS's new partner.

At Computex 2024 held in Taiwan last June, Qualcomm CEO Cristiano Amon responded to the question, "Can you compete with Intel in the PC market?" by saying, "We survived the competition in the smartphone colosseum." Having won fierce market competition, he expressed confidence that there is a good chance of success in the PC market as well.

There are obstacles to MS and Qualcomm's plans. Program compatibility is one. Programs designed for Intel chips may not be compatible with Qualcomm's ARM-based chips, similar to those used in smartphones. However, ZDNet predicted that except for games, there would be no major issues, as software companies are expected to quickly provide support.

Of course, Intel also has a countermeasure. It is a new CPU called 'Lunar Lake,' to be released in the third quarter. It might be Intel's last hope.

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