Thu, Dec 23, 2010 - Page 10 News List

Microsoft set to unveil ARM-chip Windows: source

Bloomberg

Microsoft Corp, the world’s largest software maker, will announce a version of its Windows computer operating system that runs on ARM Holdings PLC technology for the first time, said two people familiar with Microsoft’s plans.

The new product will debut at the Consumer Electronics Show next month, said the people, who asked not to be identified because Microsoft’s plans are confidential. The software would be tailored for battery-powered devices, such as tablet computers and other handhelds, the people said.

The operating system would give Microsoft another way to attack the market for tablets and phones, where it has lost ground to Apple Inc and Google Inc. ARM chips — made by Qualcomm Inc, Texas Instruments Inc and Samsung Electronics Co — are used in most smartphones, as well as Apple’s best-selling iPad.

A full-featured version of Windows for ARM chips is the best way for Microsoft to make a dent in the iPad’s lead, said Robert Breza, a Minneapolis-based analyst for RBC Capital Markets. While Windows is dominant in the personal-computer market, it hasn’t parlayed that into tablet success yet.

“They’ve got to come back with a product that’s better than ‘me too’ and is equal if not better in features,” Breza said.

He has an “outperform” rating on Microsoft’s stock, which he doesn’t own.

“A lot of tablets today are inferior to PCs,” he said.

The new software also will be able to work on Intel Corp and Advanced Micro Devices Inc processors — the chips that power PC versions of Windows. While other versions of Microsoft software aimed at phones and mobile devices work on ARM chips, this is the first time it will make a full version of Windows available on that technology.

Apple sold 7.46 million iPads from the product’s April debut through September. The device accounted for 95 percent of the tablet market last quarter, according to Strategy Analytics.

Microsoft may be able to win 10 percent to 20 percent of the as many as 50 million tablets that will be sold next year, Breza estimates. He predicted that Windows tablets will be cheaper than the iPad.

However, the market for stand-alone e-readers is growing even as Apple builds demand for the iPad tablet.

Amazon.com Inc is likely to sell more than 8 million Kindle electronic-book readers this year, at least 60 percent more than analysts have predicted, according to two people who are aware of the company’s sales projections.

Analysts surveyed by Bloomberg estimated, on average, that the company would sell 5 million Kindles this year. Last year, Amazon sold about 2.4 million Kindles, said one of the people, who asked to remain anonymous because the company doesn’t disclose Kindle sales figures.

The projections show Amazon is adding share in the e-reader market, where it vies with Sony Corp and Barnes & Noble Inc, faster than predicted by analysts at Citigroup Inc and at least five other securities or research firms.

“Kindle is gaining an unstoppable traction,” Sandeep Aggarwal, a San Francisco-based analyst at Caris & Co, wrote in a research note on Tuesday.

Analysts at Citigroup, Barclays Capital, BGC Partners LP and ThinkEquity LLC have estimated that Amazon will sell about 5 million Kindles this year. Caris & Co predicted 4.8 million, while Goldman Sachs Group Inc projected 4 million to 5 million.

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