Windows Phone 7 Sales, ARM and Nokia Rumors Dominated Microsoft Week

Microsoft's week was filled with rumors about its announcements at the upcoming Consumer Electronics Show.

On Dec. 21, Bloomberg reported that Microsoft would use the show to debut a version of Windows that leverages ARM Holdings technology. ARM chip designs currently dominate much of the mobile market, particularly in smartphones. That report, citing unnamed sources "familiar with Microsoft's plans," suggested that the new Windows software "would be tailored for battery-powered devices, such as tablet computers and other handhelds."

Microsoft and ARM declined to comment to Bloomberg, but such an arrangement between the two companies would certainly be possible. Earlier this summer, the pair announced "a new licensing agreement for the ARM architecture," which led to speculation that a deeper collaboration was in the making over mobile devices such as tablets.

Rumors about a possible ARM collaboration over Windows would complement earlier ones suggesting that Microsoft plans to use CES to debut a line of Windows 7 tablets, including devices built by Dell and Samsung. Driving those rumors was a Dec. 13 story in The New York Times, whose unnamed sources suggested that Microsoft CEO Steve Ballmer would show off the tablets during his keynote.

An ARM collaboration on a tablet-ready Windows, though, would run a bit counter to earlier reports that Microsoft would use Intel's upcoming "Oak Trail" Atom chips to power its widely expected upcoming line of tablets. Throughout 2010, Microsoft executives emphasized that Oak Trail connection so often, and at such length, that it often seemed as if Intel would exclusively power any Windows tablets in the pipeline.

"I think we're laser-focused on tablets as an emerging category," Bill Koefoed, Microsoft's general manager of investor relations, said Aug. 10 at the Oppenheimer Annual Technology, Media & Telecommunications Conference in Boston. "Intel is going to come out with their Oak Trail chip around the first of the year and, we think, that's going to offer a lot of new capabilities. Whether it's better usage of battery life and the like, it's going to really help move the category forward."

But the Bloomberg report suggested that Microsoft's new Windows software "also will be able to work on Intel Corp. and Advanced Micro Devices Inc. processors," hinting that Microsoft's tablet and mobile-device strategy—at least in the Windows context—could involve multiple chip vendors.

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