What Microsoft's ARM Agreement Could Mean

Microsoft and ARM announced an architecture licensing agreement July 23, and although the vast majority of details remain under wraps, speculation abounded over the weekend about What It All Means.

"Microsoft is an important member of the ARM ecosystem, and has been for many years," ARM CTO Mike Muller said in a statement. "With this architecture license, Microsoft will be at the forefront of applying and working with the ARM technology in concert with a broad range of businesses addressing multiple application areas."

Given the presence of ARM's processors and other systems in mobile devices, much of the speculation focused on Microsoft leveraging ARM's offerings for tablets or smartphones. The Register also suggested that ARM architecture could find its way into the Xbox, which apparently needs some processing "oomph" without the overheating issues of previous hardware iterations.

It "would make sense from a couple of different angles for Microsoft to do this," John Spooner, an analyst with Technology Business Research, told eWEEK July 23, referring to the agreement. "First, to be able to use ARM processors in its own devices--which could be portable music players or gaming machines." Second, Microsoft could use the deal to "maintain its ability to develop software for those latest processors."

What's that, you ask? What do I think about all this? If I wanted to engage in pure speculation, I'd say the licensing agreement opens the door more fully for Microsoft to not only upgrade the Xbox's internals, but also craft a series of branded mobile devices--its own version of Google's Nexus One--powerful and efficient enough to run a variety of Microsoft software. Over on her blog, Mary Jo Foley has suggested the possibility of Windows Phone OS running on ARM-powered tablets and netbooks.

Xbox and some other initiatives aside, Microsoft remains a software company with hardware partners. That places it at odds with Apple, which develops hardware and software under one roof. With this agreement, though, Microsoft could be pursuing the possibility of becoming more Apple-ish: utilizing ARM architecture as the foundation for in-house hardware (such as tablets) that run Windows 7, Office and other software. Branded mobile devices would give Microsoft a certain amount of leverage over its manufacturing partners (which have an annoying tendency to consider porting Google Android onto their upcoming tablets, or buying things like Palm), and I'm sure that running more Microsoft software on a device translates into a fatter margin.

But maybe Microsoft won't do that. Xbox only recently stopped bleeding cash, and the company's been burned by the Kin fiasco. If Microsoft sticks with its old model of just developing software, and working with hardware partners who actually create the devices and their underlying architecture, then the possible motives behind the ARM agreement become more opaque. Maybe Microsoft just wants to use the agreement's intellectual property to ensure that those partners' devices are capable of efficiently running the most expensive versions of its software.

In any case, the possibility of a market flooded with Android tablets and smartphones, combined with Apple's ever-burlier strength in mobile, probably has Microsoft considering all sorts of strategies for the short to medium term.
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