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Bloomberg, which broke the news this afternoon, reported that sources familiar with Microsoft's plans said this version of Windows will continue to work on x86 processors, but that it should improve battery performance on devices like tablets and other devices that use ARM processors.

Additional confirmation of Microsoft's plans came from The Wall Street Journal, which added that this new version will not be available for another two years. CNET heard similar reports from a source who added that Microsoft plans to detail this version of Windows at an invite-only press event several hours ahead of its CES keynote.

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That didn't exactly send shivers down the spine of executives at Texas Instruments, Qualcomm, Samsung, STMicroelectronics and others that build chips for mobile phones. They've seen this coming for a long time, an inevitable consequence of Intel finding itself with reams of chipmaking capacity and a maturing PC market. And Intel has already tried this once, spending billions trying to develop a combination of chips for the cell phone market but failing miserably. Following Intel's show in San Francisco last week, ARM developers will be meeting next week in Santa Clara, Calif.--Intel's hometown--for its annual developers' conference to discuss new applications and techniques for extracting more performance out of ARM's processor cores. The collective effort of both camps should do wonders to jump-start a market for mobile devices built for real people, not just coffee-toting executives rushing through O'Hare trying to get the 7:42 flight to San Francisco.