Intel's New PC Concept Could Benefit Another Dow Jones Component

If it wasn't for the PC, it's likely that neither Microsoft nor Intel would be in the Dow Jones Industrial Average . The once-dominant "Wintel" paradigm elevated both tech giants, as Intel's chips and Microsoft's operating system combined to dominate the computing market.

But the rise of mobile devices has hit both companies hard. Although Intel and Microsoft are working to gain footholds in the tablet and smartphone markets, they remain far behind their rivals in terms of market share.

But a new concept, unveiled this week, could change that.

Intel's 2-in-1 reference design
On Tuesday, at Computex in Taiwan, Intel unveiled a reference 2-in-1 design -- a sort of concept PC that Intel hopes OEMs will use as inspiration for future devices. The 2-in-1 is composed of a thin, lightweight, yet large (12.5-inch) tablet powered by Intel's latest processor and running Microsoft's full Windows 8.1. That tablet can dock to a keyboard, transforming it into a midsize Ultrabook in the process.

The design is remarkably similar to Microsoft's own recently unveiled Surface Pro 3, though rather than rely on a foldable cover, Intel has proposed a hard keyboard dock. Some Windows OEMs have begun to run with this idea: Hewlett-Packard today announced the Pro Tablet 612, a 12.5-inch Windows tablet that docks to a standard keyboard.

Source: Wikimedia Commons.

Windows 8 finally gets a chance to shine
PC shipments suffered a record decline last year, and market intelligence firm IDC expects the market to contract another 6% in 2014. Mobile devices have eaten away at sales of traditional Wintel devices, with some users in emerging markets forgoing the platform entirely. Technology research firm Gartner has gone so far as to predict the demise of Windows within the next three years.

These 2-in-1 devices could be the best hope to avert that looming disaster for Microsoft and Intel, though their success remains far from certain.

Early reviews of Microsoft's Surface Pro 3 have been generally positive, with many commentators remarking that the system is the first device that finally showcases the true hybrid potential of Windows 8. Although prior Surface Pro models attempted something similar, they were hindered by a relatively small screen, poor battery life, and heavy body, making them ill-suited to productive work and difficult to carry around.

Like Microsoft's Surface Pro 3, devices built with Intel's reference model in mind could garner positive reviews, as the larger screen combined with the traditional keyboard allows the Windows tablet to act as a true laptop replacement.

Buyers have rejected Windows tablets
Yet the odds are still stacked against mobile Wintel devices. Gartner reported that Microsoft's Windows powered just 2.1% of the tablets sold in 2013, while Windows tablets accounted for just 5.8% of the global tablet OS market in the first quarter of this year, according to Strategy Analytics. Mobile developers have largely shunned Microsoft's app store, leaving Windows tablets far behind in terms of mobile app availability.

Of course, these numbers don't include sales of the Surface Pro 3 or any of the upcoming devices that will use Intel's reference design. As more of those devices hit the market, consumers could embrace Microsoft's original vision: a single device that serves as both a laptop and a tablet.

If that happens, both Intel and Microsoft, should benefit tremendously, though the probability of these new, hybrid mobile devices really taking off still appears remote. Nevertheless, this new PC concept seems to be the best chance at keeping the at Wintel platform alive.

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Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Intel. The Motley Fool owns shares of Intel and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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