Microsoft Said to Add Qualcomm as Surface RT Supplier

Microsoft Corp. (MSFT), seeking to break into the market for tablet computers, will update its Surface RT using chips from Qualcomm Inc. (QCOM), people with knowledge of the company’s plans said.

Some new versions of Surface will be based on Qualcomm’s Snapdragon processors, which can deliver fast wireless data connections, said the people, who asked not to be identified because Microsoft has yet to announce new models. Nvidia Corp. (NVDA), whose Tegra chip is used in the current Surface RT, will continue as a supplier for some versions, one person said.

By adding Qualcomm, the largest supplier of chips for smartphones, Microsoft will be able to expand the capabilities of Surface. Sales of the device, designed and sold by Microsoft, have fallen short of analysts’ estimates, leaving the tablet’s Windows RT operating system with less than a percentage point of market share in the first quarter, compared with 40 percent for Apple Inc., according to IDC.

Representatives for Microsoft, San Diego-based Qualcomm and Santa Clara, California-based Nvidia declined to comment.

Qualcomm dominates the market for chips that enable so-called LTE, or long term evolution, wireless connections.

The RT version of Microsoft’s Windows is designed to get the company into the $64 billion tablet market dominated by Apple and Google Inc. (GOOG)’s Android software. It’s the first Microsoft computer operating system that works on chips which use ARM Holdings Plc (ARM) technology, a standard that dominates in smartphones and tablets.

Earlier this month, Microsoft reaffirmed its commitment to RT at the Computex show in Taiwan and said it will add a version of the Outlook e-mail and calendar application in an attempt to make it more attractive to businesses.

The Redmond, Washington-based company also makes a version of Surface that features Intel Corp. (INTC) chips and the full Windows 8 operating system. That device is capable of using programs written for older versions of Windows.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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