Microsoft's next big catalyst is Windows 8, and from the early looks of things, it blows away its past predecessors.
There was a demonstration done recently where the boot time was the fastest in Microsoft's history. On a regular laptop, it was even faster an Apple MacBook, which is known for its fast start times. Historically, this has been a major complaint of Windows users. From the looks of those videos, end users will not be complaining anymore.
What is the reason behind this? Windows 8 will now run on ARM-based chips, as opposed to just Intel chips. This is a huge design win for ARM-based chips, such as Texas Instruments, NVidia, Qualcomm, and others which have historically been shut out of the PC market. No more.
When Microsoft announced that Windows 8 would run not only on Intel chips, but ARM-based ones as well, this was a huge benefit to ARM, and a blow for Intel. Intel chips are notorious for consuming more power, which is why Intel has had a tough time getting into the mobile market. Texas Instruments, NVidia, and Qualcomm should all benefit from the move to ARM-based chips on Windows 8.
On Monday, Qualcomm said the new version of Windows would help it win laptop orders. This will not only benefit Qualcomm, it will benefit ARM Holdings, as Qualcomm chips are based on ARM designs. ARM receives royalties for all ARM-based chips sold around the world. It's the reason that ARM shares have done exceptionally in recent years, as the growth of ARM-based chips in smartphones, and tablets have helped the chips capture market share from Intel.
These chip names should all benefit as Windows-based-on-ARM becomes more popular, and consumers see the benefits of ARM-based chips, as opposed to the traditional "Wintel" monopoly. ARM Holdings is the more expensive company, trading north of 40 times 2012 earnings, while the other semiconductor names trade at lower valuations, but are not seeing revenue grow as fast.
Then there is the granddaddy of them all, Microsoft, which may benefit from the release of Windows 8.
Windows has historically been one of Microsoft's most profitable divisions, and the launch of a new operating system more often than not causes refresh cycles at corporations using Windows, which generates higher sales of the new OS.
With the launch of an App Store in Windows 8, this would be a HUGE change in Microsoft's approach to applications and software, and could potentially spur more sales of Windows 8, as it tries to emulate what has worked so well for Apple. Eventually we could see HTML 5 kill the App phenomenon, but that is way down the road. Microsoft is smart to try to capture what has worked well for Apple.
Windows 8 is still almost a year away, with it being launched in 2012. Yet with the drastic changes to the operating system that Microsoft is taking, Windows 8 could be the huge growth driver the company has sorely lacked for years. The move into the tablet market only further fuels this growth.
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