Microsoft to face computer makers' rebellion at CES

Windows 8.1 PCs that also run Android should 'scare the heck' out of Microsoft, says analyst

Microsoft will face a rebellion of long-time partners at next month's Consumer Electronics Show (CES) when OEMs introduce Windows personal computers also able to run Android mobile apps.

According to two analysts, multiple OEMs (original equipment manufacturers) will roll out what one called "PC Plus" at CES, the massive Las Vegas trade show slated for early January.

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Tim Bajarin of Creative Strategies mentioned PC Plus in passing in a Dec. 16 piece he authored for Time. "A PC Plus machine will run Windows 8.1 but will also run Android apps as well," Bajarin wrote, adding that the initiative would be backed by chip maker Intel. "They are doing this through software emulation. I'm not sure what kind of performance you can expect, but this is their way to try and bring more touch-based apps to the Windows ecosystem."

Patrick Moorhead, principal analyst at Moor Insights & Strategy, confirmed the project. "This is going to make buzz at CES," said Moorhead in an interview. "OEMs will be trumpeting this ... it's going to be a very hot topic [at the trade show]."

Concept isn't new

The concept of Android apps running on Windows isn't new.

BlueStacks, which both Bajarin and Moorhead mentioned, launched its App Player software for Windows in March 2012, added a Mac version in June of that year, and rolled out a Surface Pro-specific version in March 2013. The App Player, offered both as a free download from BlueStacks' website and through agreements with several OEMs bundled with some Windows-powered PCs and tablets, relies on virtualization -- dubbed "LayerCake" by BlueStacks -- to run Android apps on other OSes.

In July 2013, Taiwan OEM Asus introduced the Transformer Book Trio, a convertible device that, as a laptop, could execute both Android apps and Windows 8 programs, including the latter's "Modern," nee "Metro" apps. More recently, reports circulated that Samsung is developing a dual-boot tablet that could launch into either Android or Windows RT 8.1, Microsoft's touch-centric operating system.

The PC Plus project, however, is aimed at personal computers, most likely traditional "clamshell" notebooks, not tablets. And it doesn't rely on BlueStacks' technology, even though Intel invested in the Palo Alto, Calif. company in March. "This is very different from BlueStacks," Moorhead said.

While Bajarin vouched for some kind of emulation that would make Android apps possible on Windows 8.1, Moorhead posited several technologies OEMs could deploy.

"There are three [possible] implementations, including dual-boot, which would be a fast-switch mode where you press a button and within seconds you're in Android," Moorhead said. Others would include software emulation of Android within Windows, and some type of virtualization-based solution that would run an instance of Android in a virtual machine, just as OS X users can run Windows on their Macs through VMware's Fusion or Parallels' Desktop for Mac.

Ideally, the Android apps would run in full-screen mode after the user clicked on its tile within Windows 8.1.

While some have mocked the idea -- previously, Bajarin called Asus' Trio "gimmicky" -- Moorhead said that the maneuver is legitimate. "Tactically, this is a way for OEMs to differentiate their products, and build out the amount of apps on their devices," he said.

Focus on mobile apps

The latter is among OEMs' biggest concerns about its software partner. Microsoft has been criticized by customers, analysts and even computer makers for the small size, relative to Apple and Google, of its Metro app store. Selling touch-enabled laptops has not been easy for OEMs because consumers have balked at paying the higher prices when they see little in return from Windows and its app arena.

By adding Android apps to the available inventory, the computer makers can promote their wares as able to handle not just legacy Windows software but also Google's OS and its enormous ecosystem.

If that smacks of some desperation, well, OEMs are desperate. They've watched their PC business shrink over the last 24 months as consumers worldwide have postponed upgrades or forgone new purchases, instead spending their technology dollars on smartphones, tablets and hybrid "phablets" -- large-screen phones that double as a diminutive tablet for basic tasks like watching video.

Also, many OEMs who depended for decades on Microsoft and each iteration of Windows to bump up sales have been critical of the Redmond, Wash. company's Windows 8 implementation and strategy, and with the firm's decision to enter the hardware business and directly compete with them.

"OEMs are throwing some real deep passes as they see double-digit declines in the PC market," Moorhead observed. "This is one of the long balls that they're throwing, hoping something sticks."

For Moorhead, PC Plus is also another sign that OEMs are, in the face of Windows 8's sluggish start and shaky reputation, willing to desert Microsoft and enlist alternate OSes, even if those moves are experimental in scale.

"Strategically, [PC Plus] could get millions of consumers more comfortable with Android on PCs," said Moorhead. "The gamble is coincident with OEMs' interest in alternative operating systems. Just imagine for a second what happens when Android gets an improved large-screen experience."

Some computer makers, including Windows stalwarts like Dell, Hewlett-Packard and Lenovo, have already introduced laptops powered by Google's browser-based Chrome OS as a way to circumvent Windows on screens larger than tablet-sized displays.

Limited options

Android and, to a much lesser extent, Chrome OS, are the only alternate games in town for OEMs. Linux has failed to spark interest except among a tiny fraction of technology's cognoscenti. Apple's iOS and OS X are out of bounds, as Apple restricts them to its own hardware.

It will be interesting to see how Microsoft reacts to the double dipping of these OEMs. While a PC with Windows 8.1 still means Microsoft has been paid for the operating system's license, the company will not be happy with PC Plus and its implications.

"This should scare the heck out of Microsoft," said Moorhead. "They should be very, very afraid because if goes widespread, it demotivates developers to create native Windows apps."

As evidenced by the size of the Windows Store's app stock and the rushed quality of some apps, including many from top brands, Microsoft already has a hard time convincing developers to invest in a platform that has yet to gain a significant portion of the OS market. In addition, it's a platform in which many users seem comfortable sticking with the traditional desktop half and its familiar mouse-and-keyboard applications.

"Google does not actually sanction this and Microsoft has not taken a position on this dual-OS integration idea yet," said Bajarin. "It will be interesting to see if this takes off and, if so, how Google and Microsoft will feel about it once it hits the market."

If Microsoft isn't able to convince OEMs to drop the PC Plus idea, Moorhead said, it has carrots and sticks for more serious arm-twisting.

How Microsoft could respond

"I think what Microsoft will do is pull co-marketing funds from any SKU that offers Android," said Moorhead, referring to "stock-keeping units," or each individual PC model that hews to PC Plus. That would effectively raise the OEMs' cost of doing business for those PCs that support Android apps.

And if, as Bajarin said, Intel is behind PC Plus, then Microsoft faces another defection from the partnership that brought in billions for each company over the last two decades. Intel already makes processors able to run Android, and if its support for PC Plus relies on customized silicon it offers OEMs, the backing will further fragment the Wintel oligarchy.

Microsoft declined to comment on PC Plus and OEM plans.

Neither Bajarin or Moorhead had seen PC Plus in action, and Moorhead refused to offer an opinion on its chances until he did.

"I have to see the experience before I can weigh in," said Moorhead. "It could be completely transparent [the switch from Windows to Android and back], or it could really screw up the experience. There are a lot of ways you can confuse customers, and this has the potential to confuse people who use it."

The jarring discontinuity of Windows 8.1 -- which boasts not only a traditional desktop but also the tile-based, touch-enabled Metro user interface (UI) -- could be trivial compared to a disastrous combination of Android and Windows UIs.

PC Plus also has the potential to alienate Google, Moorhead noted. "I don't think Google will like this either," he said. "I think they'd be okay with dual booting and toggling between OSes, but I don't think they would like Android apps being used full-screen."

Google could retaliate by barring such hardware from obtaining apps from the Google Play e-market, speculated Moorhead, because it would see a full-screen implementation as threatening its revenue if the PCs aren't tied -- as are brand-name Android smartphones and tablets -- to the services, like search and mapping, that bind customers to its ecosystem of behavioral and location tracking.

CES will run Jan. 7-10, and Moorhead is looking forward to the trade show because of PC Plus and its impact on Microsoft-OEM relationships.

"This is a gift that will keep on giving," said Moorhead, predicting not only a splash of coverage next month, but after those initial shots of rebellion, months more ripples from PC Plus' impact.

Gregg Keizer covers Microsoft, security issues, Apple, Web browsers and general technology breaking news for Computerworld. Follow Gregg on Twitter at @gkeizer, on Google+ or subscribe to Gregg's RSS feed. His email address is gkeizer@computerworld.com.

See more by Gregg Keizer on Computerworld.com.

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This story, "Microsoft to face computer makers' rebellion at CES" was originally published by Computerworld.

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