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Best streaming sticks and devices of 2021




CNN
—  

While current TVs come preloaded with a smart interface, many are clunky, don’t offer the latest streaming services, and can lag months behind on updates to the services they do offer. The solution? Streaming sticks and boxes. These plug-and-play devices can enhance even the smartest TV and provide up-to-date access to the services you’re looking for. To help you find the best ones, we’ve spent countless hours with the top streaming boxes and sticks on the market, from Roku, Amazon’s Fire TV, Apple TV and Google Chromecast.

Best overall streaming device

The Roku Ultra is fast, responsive, delivers the widest variety of streaming services through up-to-date apps and lets you find everything easily with universal search, for a reasonable price.

The upgrade pick

You pay more for Apple TV 4K, but Apple users will enjoy the ease of control and added ability to game and access the full App Store for that extra money. It’s the complete package with the best remote we’ve ever used.

Best budget buy

With a full operating system, a remote (yes, that’s worth a callout) and support for multiple video standards, the Chromecast with Google TV delivers a tremendous amount of value at $49.99.

Jason Cipriani/CNN

We previously named the 2019 version of the Roku Ultra CNN Underscored’s best overall streaming device. With the 2020 version of the Ultra, Roku took another winning approach and made it even more attractive. From the moment you switch it on, the Roku Ultra presents one of the most seamless experiences of any streaming device we tested.

It was easier and quicker to locate preferred apps and services and to move those used most to a higher spot for even quicker access compared to other devices we tested. We were able to open Netflix, select “Parks and Recreation” and be in the world of Pawnee, Indiana, in about 10 seconds flat.

That swiftness is thanks to its quad-core processor and improved Wi-Fi, which makes the Ultra noticeably faster than other streaming devices we tested. Comparatively, the Roku Premiere takes a handful of seconds to open up an app and a few more seconds to start a stream.

Roku Ultra automatically upscales content to the highest resolution your TV can handle, up to 4K, and calibrates it to make sure it’s optimized for your screen. So if you’re streaming 720p content on a 1080p TV, it will upscale to that resolution, or if you have a 4K TV, it will deliver it at a full 4K resolution.

Content looks great, and with the addition of Dolby Vision HDR, the 2020 Ultra makes it look even better. In action titles, such as “Fast & Furious” and “Star Wars,” we didn’t experience any skips in fast scenes, and colors were vibrant but not overexposed. We previously knocked the Ultra a few points due to the lack of Dolby Vision, but with Dolby Vision joining Dolby Atmos on the Ultra, we have no more complaints.

Roku has access to some of the most popular streaming services: Netflix, Hulu, YouTube, Sling TV, AT&T TV, Philo, Disney+, Apple TV+, Peacock, HBO Max and Amazon Prime Video are all supported

The cherry on top is the included remote, which provides a simple layout with navigation buttons, voice functionality and volume controls. There’s a headphone jack built right in for personal listening (earbuds are even included in the box), and it has a speaker built in so you can ping the remote if it gets misplaced or lost in the couch cushions.

If you’re looking for a streaming box that’s fast, responsive and future-proofed with features, the latest Roku Ultra delivers at a reasonable price point of $99.99.

Apple TV 4K

Jacob Krol/CNN

Apple TV 4K

The Apple TV 4K kicks things up a notch compared to the Roku Ultra, adding gaming and countless additional apps to the menu. It’s ideal for anyone in the Apple ecosystem and who subscribes to their many services.

The upgraded 2021 model of the Apple TV 4K looks identical to its predecessor. It’s the same small block with a white LED indicator on the front and power, HDMI, optical and ethernet connectors on the back. The big change is a fast chip, inside is the Apple-made A12 Bionic in place of the A12; it proved faster during most everyday tasks in our testing, providing a fluid experience with near-instantaneous responsiveness — tvOS and the respective apps fly.

It can handle having multiple streaming services open all at once (much like how you can multitask between different apps on the iPad). You can quickly switch between Netflix and opt to open Disney+ without experiencing any slowdowns. At times, other devices we tested experienced delays when going back to the home screen, but happens instantly on the Apple TV 4K.

The big and welcomed change is the all-new Siri Remote. It’s a solid aluminum remote with a click wheel reminiscent of the iPod; you can click and hold or just touch it to control the interface. It’s much easier to navigate around the user interface. In supported apps you can even use the wheel to scroll back and forth through content. Quite handy. You also get dedicated buttons for back, play or pause, mute, the TV app, and volume. Apple’s also finally included a power button that can turn on or off your entire TV setup.

The Apple TV 4K works flawlessly for anyone within the Apple ecosystem, via an interface that will be familiar to anyone with an iPad or iPhone.. For instance, when you need to fill in a text field (like a password or search box), you’ll get a notification on your iPhone that allows you to use that keyboard to type on your TV screen. It’s leagues better than locating and selecting one letter at a time with a TV remote. It can also autofill an email field for you, and you can access your iCloud Keychain to auto-complete logins to services. It worked like a charm when we tried it on Netflix.

The Apple TV 4K supports all of the major streaming services. Via the App Store, you can find: Netflix, Hulu, Disney+, Sling TV, HBO Max, Peacock, YouTube, AT&T TV, Philo and tons of others. Countless gaming titles available through Apple Arcade, while Fitness+ subscribers will be right at home with an app that displays workout metrics from the connected Apple Watch right on the big screen. You’ll also find other core apps, including Facebook’s Apple TV app, which focuses on Facebook Watch.

You can also cast content with AirPlay or AirPlay 2 from your iOS, iPadOS, macOS and watchOS devices — everything from viewing photos or videos from your iPhone to a YouTube video and even mirroring your display.

Like the Roku Ultra, Apple TV 4K will auto-scale content up to 4K Ultra High Definition, and it also supports HDR, HDR 10, Dolby Vision and Dolby Atmos. If you currently have a 1080p HD TV, the TV 4K will present content at that resolution and calibrate it for your TV panel. There are minute differences between the calibrations Apple takes versus Roku, but in the end you’re getting an accurate, clear and vibrant experience with Apple TV 4K. It goes a step further but future-proofing with support for high-frame-rate content. It makes a difference currently in the Red Bull app, but you’ll need a TV capable. Don’t upgrade just for this.

You pay more for Apple TV 4K, but Apple users will enjoy the ease of control and added ability to game and access the full App Store for that extra money. At $179.95, it’s not the cheapest streaming device option, but it is the complete package with the best remote we’ve ever used.

Jacob Krol/CNN

With a full operating system, a remote (yes, that’s worth a callout) and support for multiple video standards, the Chromecast with Google TV delivers a tremendous amount of value at $49.99. And on top of all that, you also have the ability to cast content straight from your phone.

Unlike the Fire TV Stick 4K (our previous budget pick), you don’t have a clunky software experience that pushes the content you want lower. With Google TV, the software running on Chromecast, it’s pretty clean and puts your preferred content upfront.

The interface features six main categories: For You, Live, Movies, Shows, Apps and Library. Many of these are self-explanatory, but the real kicker here is that Google serves up recommendations from a plethora of services all in one spot. That means under For You, you’ll see suggested content that’s live on YouTube TV, a classic from Netflix and even new titles on HBO Max or Peacock. So no clicking around to find content you want within different apps.

Under the Apps section is where you can find your streaming services and download the respective apps. All the big players and even smaller ones are here — like Netflix, Hulu, Plex, and countless others. The latest streaming services on the block, HBO Max and Peacock, both work out of the box on the Chromecast. That bests Amazon’s Fire TV platform and even Roku, which both only have one or the other. For some, that’s reason enough to opt for the Chromecast. The only big one missing here would be AppleTV+. YouTube is of course front and center, along with YouTube TV. The latter is Google’s cord-cutting solution and if you use the platform, this is the streamer for you. It’s integrated directly into all the categories and has a dedicated guide found under the Live section. It will even place your favorite shows, as they’re airing, in the respective content recommendation tabs. On a Roku or the Apple TV, it’s just another app and doesn’t offer deep integration throughout.

Choosing content is as simple as selecting the tile and the Chromecast starting the stream. It all happens very swiftly and the performance of this smaller dongle is on-par with that of the Roku Ultra.

And rounding out the Chromecast with Google TV is the Google Assistant. You can ask for any query or question your brain can think of — and that extends to TV content. You can ask for a specific show or movie, and it pulls up a page about the title, including multiple ways to stream it.

After countless hours of binging content –— ahem, we mean testing — we can safely declare the Chromecast with Google TV to be the best budget play at just $49.99. You’d be hard pressed to get more value from the Fire TV Stick 4K (which is the same price), and this performs better than cheaper options from Amazon or Roku.

While some of these are sticks and others are boxes, the core use case is to stream content to your TV. And we crafted categories that best reflect that core premise.

Under the Ease of Setup category, we focused on what came in the box and the process for getting the device working. In some cases, it was as simple as plugging it in and connecting to Wi-Fi; for others, we held a device nearby for fast pairing.

Performance tackled more areas, notably the ecosystem, quality across watching the content and available apps and services.

On the quality perspective, we calibrated each streaming device for the TV and then checked out the upscaling. Most importantly, we ensured that it reached 4K UHD or 4K Ultra High Definition as well as checked out the supported standards.

In terms of the build, we looked at the outside and the overall quality of the design. Did the materials live up to the price point? Was space wasted? And what did the controls and ergonomics of the remote mean for the user experience?

We tested all of these streamers with a range of TVs: a 55-inch TCL 6-Series, a 55-inch LG CX55, a 65-inch Sony A8H, a 65-inch TCL 8-Series, a 55-inch Vizio V-Series, a 65-inch Vizio M-Series and a 75-inch Vizio P-Series. Additionally, for the network, we tested hardwired and wirelessly with a FiOS Gigabit connection. We also tried 4G LTE and 5G hot spots from AT&T and T-Mobile for Wi-Fi streamers.

Apple TV ($144; amazon.com)

The standard Apple TV tested nearly as well as the upgraded Apple TV 4K. It has a slightly slower processor but still runs tvOS, offers deep integration to the Apple ecosystem and uses the Siri TV remote. But we think it makes more sense to opt for the Apple TV 4K, as it future-proofs you.

Fire TV Stick ($39.99; amazon.com)

The non-4K Fire TV Stick is nearly identical to the 4K Fire TV Stick. What’s the big difference? It only supports up to 1080p HD streaming and lacks Dolby Atmos audio. It has the same processor, and in our testing it performed nearly the same. But for $10 more, you’re better off opting for the 4K variant to truly future-proof your TV.

Google Chromecast ($29.99; target.com)

The Chromecast has come a long way, and the current one is quite nice. It still just plugs into the back of your TV and allows you to cast via the “Google Cast” standard to your TV. It doesn’t provide an interface, so you need to use an Android device, iPhone, iPad or laptop to control the experience. To some degree, it’s nice, since you don’t need to re-sign in and can open the Netflix app, hit the Cast icon and send it to the big screen. At $29.99, it’s cheap, and if you’re sold on Google Cast, it’s a good option, but it’s only 1080p HD.

Google Chromecast Ultra ($69; bhphotovideo.com)

As we said, the Achilles’ heel to a degree of a Chromecast was 1080p HD and that it doesn’t have an interface. For $69, the Chromecast Ultra solves part of that. The Ultra supports up to 4K UHD and more than 2,000 services. But for that price, you can score the Roku Ultra, which is a full-fledged streaming box that doesn’t simply rely on your connected phone.

Fire TV Cube ($119.99; amazon.com)

We really enjoyed our time with the Fire TV Cube, but to a degree, it feels like it’s trying to be too much. The premise? It combines an Alexa smart speaker with a Fire TV streaming device. It’s a square box that’s taller than most streaming devices and has the classic blue light strip on the front. You can ask Alexa to turn on the TV, but it doesn’t offer full voice control. Performance-wise, it’s fast and it meets the quality standards with 4K UHD and HDR support.

Roku Express ($24.99, originally $29.99; amazon.com)

This is Roku’s entry-level device, which is affordable at $30, but for $10 more, you can get the Streaming Stick+, which is faster, has a voice remote and features 4K UHD streaming. It’s just better by every stretch of the imagination. Although the Express comes with an HDMI cord, we think you’re better off with the Streaming Stick+.

Roku Premiere ($39.99; roku.com)

The Roku Premiere is kind of like an enhanced Roku Express that adds 4K support and keeps the non-voice remote. You also get an HDMI cable, but it’s not as fast as the Streaming Stick+.

Roku Streaming Stick+ ($39, originally $49.99; amazon.com)

Yes, Roku’s Streaming Stick+ is faster than our budget pick and gets a more feature-filled remote. We really like the built-in volume controls but found that voice control wasn’t critical to the core streaming experience. Especially when price was a key focus. If you don’t mind the unique design and a more basic remote, the Roku Premiere still delivers 4K support at an even cheaper price.

Read more from CNN Underscored’s hands-on testing:



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TV company focusing on ads over devices


An employee arranges a display of Vizio Inc. high-definition televisions at a Best Buy Inc. store in Paramus, New Jersey.

Mark Kauziarich | Bloomberg | Getty Images

Vizio emerged as a top-selling TV company in the U.S. about 15 years ago by securing deals with big box stores like Costco and Best Buy and selling high-definition TVs at cut-rate prices.

The company now sells over 7 million TVs a year and generates close to $2 billion in revenue from those devices.

But that’s not the story Vizio is selling to investors as it prepares to go public on the New York Stock Exchange next week.

“One of the primary addressable markets that we’re focused on for our future growth is, of course, television adverting,” said Vizio CFO Adam Townsend in the company’s online roadshow promoting its IPO. “The shift in viewers from linear to ad-supported streaming is significant and we know the ad dollars will follow viewers more and more.”

While Vizio competes with Samsung, Sony, LG and TCL in getting its big screens into American households, the competition that matters most is now from streaming providers Roku, Amazon and Google. Almost all of the growth in the TV industry is in subscription services like Netflix, Amazon Prime Video and Disney Plus, and from advertisers who want to reach the millions of people switching to over-the-top viewing from traditional cable.

Vizio needs people to buy its TVs, even at a small profit margin, so it can make real money through its homegrown operating system, SmartCast. Like Roku, Amazon Fire TV and Google TV, SmartCast provides access to most major streaming services (though not HBO Max) along with a host of free and paid channels.

Vizio generates revenue from advertising on its home screen and within some free content, and it gets a cut of subscription sales to Netflix and other services when people sign up on their SmartCast TVs. SmartCast accounts jumped 61% last year to 12.2 million.

Paul Erickson, an analyst at research firm Parks Associates, said Vizio’s biggest advantage in trying to lure advertisers is that it’s a popular brand with a big footprint in retail and a major in presence in American homes. In a market that Samsung dominates by units sold, Vizio is consistently a top three vendor.

“If you’re trying to reach a TV manufacturer that reaches a lot of the market in the U.S., certainly they are very present,” he said.

The growth is in streaming

Vizio was founded in Los Angeles 19 years ago by William Wang, a Taiwanese immigrant who famously survived the crash of Singapore Airlines Flight 006 in 2000. By 2007, Wang had turned Vizio into the top-selling flat-panel TV maker. In a video for potential IPO investors, Wang said he was selling Vizio’s first plasma TVs at Costco for under $2,000 when rival products were running at over $10,000.

In 2016, Vizio introduced SmartCast to run its popular TVs with its own software.

“Many brands are out there fighting for the limited space at retail,” Wang said in the video. “To stay competitive, we knew we needed to find a way to gain recurring revenue from the deployed TVs, which would enable us to keep the costs of TVs low for our retailers and consumers.”

Vizio took its first shot of going public in 2015, when it was actually bigger by revenue than it is today due to higher TV prices. The company pulled its IPO in 2016 after China’s LeEco offered to buy it for $2 billion. The deal fell apart the following year because of regulatory complexities, and in 2018 Vizio sold stakes to Taiwanese manufacturing partners Foxconn and Innolux.

A quick glance at Vizio’s financials makes it readily apparent why the company’s future hinges on streaming.

Device revenue in 2020 rose 7% to $1.9 billion, but remains below the total from 2010. That’s because the price of TVs has been dropping every year, offsetting increased shipments. Meanwhile, Vizio’s streaming business, or what it calls “Platform+,” saw growth of 133% last year to $147.2 million.

While the platform business accounted for just 7.2% of total sales, it generated 38% of Vizio’s gross profit, enabling the company to quadruple its net income for the year.

Chief Revenue Officer Michael O’Donnell said in the investor presentation that the company launched its ads direct sales team a little over a year ago. Brands including Campbell Soup, Guinness, Fitbit, AT&T and Progressive are spending money to reach SmartCast users in a targeted way, similar to how they find relevant audiences online.

Vizio is also making its debut at top ad industry events. In May, the company is participating in the Interactive Advertising Bureau’s NewFronts, where online publishers and platforms show off their programming, audience data and tools to media buyers. Amazon, Snap, Twitter and Google’s YouTube will also be there.

An ad for FireTV on TeaTV.

Megan Graham

Investors will need a lot of convincing if they’re to ever value Vizio as something other than a consumer hardware vendor. In its updated prospectus on Tuesday, Vizio said it expects to sell shares in its IPO at $21 to $23 piece, which would value the company at $4.2 billion at the top of the range.

At about 2.1 times 2021 revenue, that would make Vizio trade closer to old stodgy hardware companies like Samsung and Sony than it would to Roku, which currently commands a price-to-sales multiple of 26. The particular challenge for Vizio is that it needs consumers to first choose to buy its TVs and then opt to use its operating system rather than plugging in a Roku, Google or Amazon device.

“To the extent consumers who purchase a Vizio Smart TV do not engage with our SmartCast operating system and instead use their Smart TV with one of our competitors’ solutions or for other purposes, our ability to generate Platform+ net revenue may be harmed,” the company acknowledges in its prospectus.

VIZIO CEO William Wang at LeEco and VIZIO Press Conference in Hollywood where it was announced that LeEco had acquired VIZIO for $2 billion, Tuesday, July 26, 2016 in Los Angeles.

Jeff Lewis | AP

Voice is the future

Vizio’s streaming business remains in its early stages. One area where it’s investing is voice control to make it easier for consumers to navigate, buy things, and work with other smart home products. Between 2018 and 2019, Vizio’s SmartCast integrated with Amazon Alexa, as well as offerings from Google and Apple, “thus enabling our Smart TVs to work with all three major voice assistants.”

Vijay Balasubramaniyan is keeping close tabs on the development of voice controls in smart TVs. He’s the CEO of Pindrop, which develops security software for voice communications and partnered with TiVo earlier this year to power its voice controls after TiVo abandoned Alexa.

While he hasn’t had discussions with Vizio, Balasubramaniyan said the whole industry is experimenting with how to make voice not just a feature for turning on the TV and moving between apps and shows but a useful way for improving monetization.

“Between being able to provide better advertising to being able to do voice commerce on TV, those are two increasingly important areas that each of these Smart TV manufacturers are looking aggressively in,” Balasubramaniyan said.

WATCH: Netflix remains important selling point for smart TVs



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Future

Why Walmart is looking to beyond retail for future growth


A woman wearing a face mask walks past a sign informing customers that face coverings are required in front of a Walmart store in Washington, DC on July 15, 2020.

Andrew Caballero-Reynolds | AFP | Getty Images

Walmart wants to tap what it sees as its greatest asset: its reach.

Every month, 160 million customers visit its stores or its website. The company not only wants to sell groceries, clothes and other items. It wants to chase new business opportunities, from bulking up its ad sales to becoming a major health-care provider. With the strategy, Walmart is acknowledging a tough reality: Retail may not be enough to power its future.

On Thursday, the retail giant’s leaders spoke at a virtual investor day and detailed a plan to sustain momentum as some pandemic-related tailwinds fade and online sales swell.

Walmart CEO Doug McMillon said the discounter will weave together diverse services that customers want, from issuing a credit or debit card to dropping off groceries to their doorstep. It will also increase investments to cater to customers’ changed shopping habits, such as automation that will help it keep up with the heavy volume of curbside pickup orders.

“We feel emboldened and are now moving with even more speed and aggressiveness,” he said. “We’re scaling new capabilities and businesses and designing them to work together in a mutually reinforcing way.”

A new playbook

With the move, the big-box retailer is taking a page from retailers like Apple and Amazon that have built an ecosystem of products and services to deepen loyalty and win more of customers’ wallets. Amazon Web Services has been the profit engine of its parent company, helping the e-commerce giant offset the challenging economics of selling items it must pick, pack and ship.

It’s riffing off another Amazon strategy, too. This fall, it launched Walmart+, a subscription-based service with perks like free shipping and unlimited grocery deliveries to the home. The service costs $98 a year or $12.95 for a month.

Walmart faces skepticism as it unveils the new playbook, however. It fell short of fourth-quarter earnings estimates, despite a robust holiday season and sales lift from stimulus checks. The results and its forecast for moderating sales in the year ahead prompted a sell-off. Shares were down more than 5% midday on Thursday. In the fiscal year, Walmart grew its revenue by $35 billion, but higher sales alone won’t get it to higher profits.

Remaining competitive will require big-ticket investments. Walmart plans to spend about $14 billion in the coming year, improving its supply chain and adding automation, the company’s CFO Brett Biggs said. That’s higher than its typical rate of $10 billion to $11 billion, he said. These improvements will likely make online sales more efficient and profitable.

Still, McMillon sees a way for Walmart to capitalize on its assets — including its more than 4,700 U.S. locations. For example, the company can turn TV and checkout screens in stores into ad opportunities, use its large parking lots to support health clinics that it is opening in parts of the country and promote online merchandise through TikTok livestreaming event.

“This is the right time to make these investments,” he said. “The strategy, team and capabilities are in place. We know where the customer is going. We have momentum and our balance sheet is strong.”

Staying a few steps ahead

Walmart recently renamed its ads business and told CNBC it wants to grow that division by more than ten times in the next five years. It has opened 20 health clinics with lower-priced medical services like annual physicals, dentist checkups and therapy appointments — with plans for more. It is launching a fintech start-up with investment firm Ribbit Capital to offer unique, affordable financial products for its customers and employees.

McMillon said the company must stay a few steps ahead, especially as it sees such rapid change in the retail industry. The pandemic has permanently changed how some customers shop by fast-forwarding many of the customer trends Walmart was preparing for, according to McMillion.

“In the future, people will still want to shop in compelling stores, but more and more there will be occasions when they prefer to pick up an order or have it delivered,” he said.

“Some customers will eventually allow us and pay us to keep them replenished in their homes on the items they routinely purchase,” he said. “For an increasing number of customers, Walmart will be seen more like a service. Customers will think of us as the merchant that serves their wants and needs, but in ways that take less time and effort.”

And that’s why it’s investing in turning its stores into mini warehouses that use robots and employees to quickly complete online orders for delivery or curbside pickup. That, in turn, will help attract more members to Walmart’s subscription service, Walmart+, since home deliveries are a key reason why customers sign up, he said.

But, McMillon added, Walmart is letting go of some areas as it invests in others. He said it will continue to divest from markets and businesses, which allow it to focus on areas with greater growth potential.



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News

Intel falls on report Microsoft will design own chips for PCs, servers


Satya Nadella, chief executive officer of Microsoft Corp., speaks during the company’s annual shareholders meeting in Bellevue, Washington, on Nov. 29, 2017.

David Ryder | Bloomberg | Getty Images

Intel dropped 6.3% on Friday following a Bloomberg report that Microsoft plans to design its own chips for its Surface PCs as well as servers.

Intel has famously had a long-running partnership with Microsoft as the primary processor maker for Windows PCs.

“Because silicon is a foundational building block for technology, we’re continuing to invest in our own capabilities in areas like design, manufacturing and tools, while also fostering and strengthening partnerships with a wide range of chip providers,” Microsoft spokesperson Frank Shaw said in a statement.

The report comes a month after Apple started selling PCs using its own M1 processor, instead of Intel chips. The Microsoft chips are reportedly based on technology from Arm, which Nvidia is in the process of acquiring from Softbank.

Apple’s chips for its iPhones and Amazon‘s server chips are also based on Arm’s instruction set, which is distinct from the x86 technology Intel primarily uses.

Earlier this month, a senior Microsoft executive did not reject the idea that Microsoft would build its own “first party” chips at a conference.

“The partnerships that we have though in this realm, from the OpenAI efforts that we have to our relationship with Intel and Arm developments that we have certainly point to the need to have advanced capabilities here, whether we build it first party or have an ecosystem of third-party partners, it’s sort of yet to be disclosed,” Judson Althoff, executive vice president of worldwide commercial business at Microsoft, said during an appearance at the UBS Global, Technology, Media and Telecommunications conference on December 8.

Windows currently runs on Arm-based PCs, usually with chips made by Qualcomm. Microsoft introduced the Surface RT tablet in 2012 that contained an Arm chip from Nvidia, although the device was discontinued in 2013. Last year it introduced the Surface Pro X containing a Qualcomm Arm chip, and it came out with an updated version of the device this year.

Microsoft said in 2017 that it was working with Arm server makers to optimize silicon for use in its own data centers.

Intel reported $9.85 billion in revenue from its group that sells PC chips in the quarter ending in September. Server chips are also a major business for Intel. In the quarter ending in September, Intel reported $5.91 billion in revenue for its Data Center Group that sells server chips.

Intel has had challenges with manufacturing its chips in recent years. Intel controls its own chip factories, called “fabs,” as compared to other chip designers, which contract with companies in Asia to manufacture chips to client specifications.

The more transistors that a chipmaker can fit into the same space, the more efficient a chip is. Currently, Intel ships chips with 10-nanometer transistors, but dedicated foundries, like TSMC, are now making 5-nanometer chips, which are technically superior.

Earlier this year, Intel CEO Bob Swan said that it was considering outsourcing its manufacturing, like what Apple does.

Representatives for Intel and Microsoft didn’t immediately return requests for comment.

—Jordan Novet contributed to this story.



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