In the last few months, two massive switch-ups have called the future of OEMs into question: First, Google bought Motorola — and second, come October 26, Microsoft will sell its first ever home-grown computer: The Surface tablet.

The enormity of these two developments can’t be understated. For almost as long as Microsoft has existed, OEMs have ridden its coattails and made hundreds of billions of dollars in the process. Last year, more than 350 million Windows PCs were sold — all of them produced by OEMs. IBM, which launched the original PC, was buoyed by Microsoft software until it sold out to Lenovo — which is now the second largest PC maker in the world. Compaq and Dell both started their lives as producers of IBM PC clones, running MS-DOS. There are probably hundreds of OEMs that owe their existence to Microsoft’s software.

Android has done the same for smartphones. Samsung, a massive conglomerate with 340,000 employees, derives 60% of its earnings from its mobile division — which in turn stem from the Android-powered Galaxy smartphones. HTC, now one of the world’s largest smartphone makers, was virtually unheard of before Android. All told, once you factor in smaller, regional OEMs, there are probably dozens of companies that owe their existence to Android.

So long, cash cow

It is no surprise, then, that Windows and Android OEMs are rather upset that Microsoft and Google are getting into the hardware game. “We think that Microsoft’s launch of its own-brand products is negative for the whole PC industry,” says Acer. Dell and HP have both abandoned their plans to produce ARM-based Windows RT (8) tablets, presumably because of competition from Microsoft’s Surface. Google is at pains to point out that the Motorola acquisition won’t impact its partnerships with Android OEMs, but as we’ve already seen with the Nexus Q — Google’s first home-made Android-powered device — the situation is a little more complex than that.

You can empathize with the OEMs, though. For decades, these companies have had an incredibly easy ride, producing mediocre, commodity computers, and getting very rich in the process. Now, out of nowhere, the rug has been pulled out from under their feet. The free ride is over, the golden goose has been plucked — they’re forced to innovate, or die.

This is a problem, however, because most OEMs simply aren’t set up to be innovative — they’re manufacturers of commodity goods, rather than desirable, artistic, feel-good products. Over the years a few OEMs have tried to buck the trend — Sony’s $2000 Vaio laptops are a good example — but for some reason, the idea of a posh, sexy Windows machine has never really taken off. I guess it’s kind of like Chevy producing a $100,000 Impala — it might have gold-plated rims and seats upholstered with the tanned skin of Scandinavian virgins, but it’s still an Impala.

Hubris

The OEMs should’ve seen it coming, though. For almost a decade now, Apple has been investing billions of dollars in its Asian supply chain. There is a reason that Apple’s computers look and feel like nothing else on the market: Other companies do not physically possess the equipment or resources to produce anything that even approaches an iPhone or MacBook Pro. Famously, back in November last year, with Intel breathing down their necks, OEMs said they couldn’t produce ultrabooks comparable to the MacBook Air because Apple has a monopoly on the production of unibody chassis.

Why did OEMs get caught with their pants down? A mixture of hubris and lack of foresight. It seems insane now, but five years ago the world thought netbooks were the wave of the future — and then the iPhone happened. After 20 years at the top, smartphones outsold PCs last quarter. Ditto the iPad (which has only been around for two years!), combined with other tablets, are expected to outsell desktop PCs by next year. Apple has the industrial design, supply chain, and fanatical consumer support to pull the market in whichever direction it wants. All OEMs can do is try to keep up — and as we’ve seen, with falling profit margins, crappy non-iOS smartphones and tablets, and shoddy laptops and all-in-one desktops, following in Apple’s shadow is hard.

And now along comes Microsoft. The Redmond company is between a rock and a hard place: Laptop and desktop PC sales have stagnated, and smartphones and tablets are quickly cannibalizing the 95% market share that has always ensured Microsoft’s relevancy. On the one hand, Microsoft owes its existence to the software licenses bought by OEMs — but on the other, if Microsoft doesn’t move quickly, it runs the risk of going down with the Windows ship, obsolesced by Apple, Google, and others.

I’m sure Microsoft would love it if its OEMs could keep up with market trends, but they can’t — and so it falls to Microsoft to produce a tablet that can swing the market back towards Windows; if you can’t beat Apple, join ’em.

Farewell, OEMs

If the Surface tablet is a success — and with its design, specs, price point, and Microsoft’s marketing dollars, you have to assume it will be — then I think we can say goodbye to the OEM PC market. HP and Dell will live on, selling enterprise hardware and support, but their PC divisions will be shut down — or perhaps sold off to Lenovo. Perhaps Lenovo can subsist at the bottom end of the market, or maybe it too will shut up shop.

This could be a very exciting period for PC owners. Microsoft’s tablet is a first-party device with unified software and hardware — just like an iPad, or a MacBook Pro. You won’t have driver or app compatibility with Surface, because they all have exactly the same hardware inside. Devs will be able to make Metro apps that perfectly utilize the hardware — like Android and iOS — and, if we’re lucky, we might even see the rise of Desktop apps, such as Photoshop, that are specially crafted for the Surface’s touchscreen.

The risk, though, is that Windows 8 might be the last Microsoft operating system that you can install on your own hardware. If the Surface is a huge success, then Microsoft will rightfully plow a lot of resources into its successor. If Surface becomes the predominant PC platform, then why should Microsoft go out of its way to support the thousands of hardware and driver permutations employed by OEMs and DIY computer builders?

As computing becomes ever more mobile and more device-centric, stability and efficiency is key. One of the key reasons for the speed, stability, and power efficiency of the iPhone and iPad is that iOS is specifically tailored to the hardware. Windows 8 might be the fastest and most stable OS that Microsoft has ever developed, but it would be even better if it only worked on the Surface.

Read: The history of the PC, or One Windows to rule them all