Both Microsoft and Intel to begin with, were in the right direction in the onset of mobile efforts. Years back Intel had Xscale (Strong ARM) and Microsoft had Windows CE. Both were technically ahead of their time (for mobile that is) but OEM's were only half hearted in which the only serious developments were up to phone-PDA applications or large "touch screen" type tablets.
Looking back, both companies ideas were looking into small factor mobile devices that would emulate their big PC brothers in which techies on in-the-know could expertly use. It was another instance of "people adapting / learning technology" NOT "technology simplified for the consumer" which is what Apple did for the tablet.
In the end, Intel just decided to sell Xscale and Microsoft just gave up on windows CE.... only seeing them back years after, this time knocking on the tablet bandwagon.
But one wonders, if they just stuck to it long enough,..... if they had adapted to looking at simplification and the common consumer in mind, should we now be looking forward to the latest Wintel mobile device or tablet instead of an Android or Apple OS device? Instead of the "baby step" efforts that we see right now from both giants?
My observation of folks with tablets is that they use them as an entertainment appliance. They read books, check Facebook, and watch Netflix. I would almost say it is replacing TV instead of computers. As described by Duane, it is an entertainment appliance that is much easier for most folks to use than a PC (or laptop), particularly those folks in their 70's or 80's.
What if I could turn the lid on my macbook air around and close it with the screen out? Pretty close to a tablet, no? I look for tablets and laptops to merge along these lines. And ARM chips won't be inside.
All Windows Phone 7/8 devices use ARM chips. They only partner with Intel in the PC market, and even then there is no explicit "partnership". Any exclusivity x86 had was abolished with the announcement of Windows RT.
Cost-wise, full-size (i.e. display size over 9") media tablet and smartphone can be more expensive than a cheap yet far more powerful notebook PC. When the novelty wear off, the end-users may ask: why am I paying more for less (computing power)? Is mobility worth so much more? In any case, there are always a lot of the average non-technical person in the market.
Microsoft has no choice but to end partnership with Intel. Intel is behind in SOCs process/design due to lack of wireless design IP building blocks and non optimal SOC silicon process technology. For design, example, take LTE modem. No discrete chip available in market currently and integrated LTE plus Atom chip will not happen until late 2014 (Qualcomm on the market now).
Intel's fast process node race worked well for a single point design of a digital microprocessor. SOCs are much more complex with many different IP blocks. Intel's great manufacturing "lead" is a handicap in mobile SOC since (1) wafers are expensive, (2) process moves too fast (spice models always changing), and (3) has lots and lots of design restrictions, and (4) no support for good RF devices (required in the mobile world).
The "decline of Wintel" is far more worrying for Microsoft than for Intel. Apple has been using Intel chips in their computers for quite a while now, and they command around 10% of the US PC market. Although they don't have much share of the mobile space, their foray to this market is still in its infancy, and future products could change things considerably.
Even as a latecomer, there's very little preventing mass-adoption of x86 in mobile. Consumers aren't tied to particular brands of chips like they are to handset manufacturers (though Intel itself may have some mindshare). If they can convince OEM's to adopt their chips into major products, then they could achieve the same domination of the mobile space that they enjoy in the PC space. For instance, what if the (hypothetical) iPhone 6 or the Galaxy S4 used Atom processors?
One of the appeals of tablets is that they are much more like a true appliance than is a PC. They do less, but they do less with a lot less user fuss. PCs will stay around for a very long time, because, as Bert says, tablets augment but don't replace. I'd would add "in the core PC market."
Part of the big miss here is that there are quite a few people that don't need the capabilities of a full PC. The more limited functions of a tablet will take care of their needs just fine and, because it's instant on, more portable, and comes with less hassle, holds more appeal to that set.
Wintel missed the boat, not because they are going to be replaced by tablets, but because there pretty much isn't any technical reason why a Wintel device couldn't have had a game-winning portion of the tablet benefits well before the iPad.
It's the year 2012 and while my laptop is massively more powerful and capable than my computers of years past, it's really not much easier to use than a Windows 3 computer from the prior century. It doesn't boot any faster. It's measurable easier to install peripherals, but not necessarily much easier to keep them up to date and working.