HP dropping Windows 7 tablet: Bad news for Microsoft and Intel?

Yesterday, word unofficially came out that HP is killing the Windows 7-based tablet that it's been demonstrating for months, on the grounds that Windows 7 isn't an appropriate platform for building tablet applications and requires too much power. Another rumor started circulating that HP is planning to shift to non-Intel CPU designs for tablets (most likely ARM- or Snapdragon-based designs) because Intel's Atom processors use too much power.

If HP couldn't get Windows 7 to work as a tablet platform, it's unlikely that other vendors are going to have much more success. Microsoft compounded its problem by announcing that its Courier project, a two-screen, book-like tablet with a custom operating system and applications, has been killed. It now looks like Microsoft will only be a bit player in the tablet business, at least for a while.

Intel will similarly be hurt by HP's decision to shift to non-Intel processors for tablets. Both Intel and Microsoft are looking for new areas of profitable growth, and tablets are the hottest new platform. If Intel doesn't have a practical solution for tablets, it will miss a big growth opportunity, at the same time that sales of netbooks (the primary customers for Atom CPUs) are slowing.