Microsoft is taking its biggest step away from a long-standing, lucrative alliance with Intel, teaming up with Britain's ARM Holdings to take on Apple in the red-hot tablet and smartphone arena.
Microsoft , the second-largest US technology firm, plans to design a Windows operating system compatible with chips designed by ARM, an Intel rival and the dominant producer of chips for smartphones and tablet computers.
Chief executive Steve Ballmer pitched the move in a typically ebullient opening address at the Consumer Electronics Show in Las Vegas, looking to convince investors that his company can hold its dominance in a world moving away from PC-centric computing.
"Whatever device you use, now or in the future, Windows will be there," said Ballmer, stalking the stage in a packed, supportive auditorium, in his trademark blue shirt and slacks. "Windows will be everywhere on every kind of device, without compromise."
Investors and analysts were not immediately convinced that the software giant can maintain the dominance of Windows as Apple's iPad leads the exploding tablet market and Google's Android smartphone systems take off.
"The PC is not going to be the 95 percent dominant solution five years from now," said IDC analyst Al Hilwa. "The trajectory of the iPad and all these Android devices is to take on multiple form factors."
The lack of a coherent strategy on tablets hobbled Microsoft's share price last year, and its shares continue to trade around the same level they did eight years ago.
Microsoft's move is the latest major win for ARM, which is making huge strides in mobile computing and yesterday also announced that graphics chipmaker Nvidia will begin designing central microprocessors for computers based on ARM architecture.
Microsoft's new approach marks a shift away from Intel , whose chips have held a hegemony on Windows operating systems on personal computers, and suggests the breakdown of the fabled "Wintel" alliance, which set the standard in early computing.
It is unclear what the decision will mean for Intel’s operations in Leixlip, Co Kildare which employs about 4,000 staff.
The US software maker offered no time frame for the launch of the ARM-supported operating system version, but Windows unit chief Steven Sinofsky said Microsoft typically aims for 24 to 36 months between major Windows versions, suggesting a launch date of between October 2011 and October 2012.