Microsoft Brings ARM Into the Fold

NEW YORK ( TheStreet) -- Microsoft ( MSFT) is getting serious about smartphones and its long-standing relationship with Intel ( INTC) seems destined to suffer as a result.

After Wednesday's closing bell, Microsoft said the next-generation of its Windows operating system will work with the "system on a chip" designs of Intel's much smaller rival ARM Holdings ( ARMH), whose technology has become dominant in mobile devices, including smartphones and tablet computers.

The software giant said Windows would support chips from Nvidia ( NVDA), Qualcomm ( QCOM), and Texas Instruments ( TXN) that use ARM-based systems, and that Intel and Advanced Micro Devices ( AMD) would continue to work on low-power designs that also fully support Windows.

"With today's announcement, we're showing the flexibility and resiliency of Windows through the power of software and a commitment to world-class engineering," said Steven Sinofsky, the president of Microsoft's Windows and Windows Live Division, in a press release. "We continue to evolve Windows to deliver the functionality customers demand across the widest variety of hardware platforms and form factors."

The news was announced at the Consumer Electronics Show being held in Las Vegas, where TheStreet was liveblogging earlier on Wednesday.

Shares of ARM edged higher in extended trading, adding 1.4% to $22.18 on volume of nearly 120,000, according to Nasdaq.com. The advance comes with the stock sitting right around its 52-week high after more than doubling in 2010.

-- Written by Michael Baron in New York.

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