At their first ever Executive Summit Wednesday, Microsoft and embedded microprocessor maker ARM announced that three new silicon makers, Motorola, STMicroelectronics and NeoMagic., will develop products optimized for Microsoft Windows CE .NET. The companies will make Pocket PCs and other mobile devices based on Windows CE .NET, and running on the ARM architecture, which is widely considered to be one of the most efficient and speedy embedded processors currently available. The announcement gives Microsoft three major chipmakers--Intel, Texas Instruments, and now ARM--supporting its CE .NET offerings.

"The most exciting thing about this announcement is that Microsoft and ARM are engaging in a two-way collaborative relationship, where the OS and the chip architecture are developed in parallel," Eric Carpenter, the director of Strategic Platforms at ARM told me. "This is more and more important because these products are getting more complex. The software and hardware should be created together from the beginning, and not stitched together after the fact." The close co-development of future Windows CE .NET versions and the ARM architecture makes the platform a more compelling solution for the companies working on PDAs, smart cell phones, smart displays, and other embedded devices, Carpenter noted.

"This is a two-way dialog," agreed Microsoft's Scott Horn, the director of marketing for the Embedded and Appliance Platforms Group. "We are working together with ARM so that OEMs can have better choice and innovation. It's pure goodness."

Companies such as Motorola will begin huge marketing pushes this fall for Pocket PCs and other devices based on the ARM/Windows CE .NET platform. Motorola is also releasing Palm OS 5-based devices.