Is Windows RT Killing Microsoft?

As some analysts scale back the number of Surface tablets that Microsoft (NASDAQ: MSFT  ) will sell this quarter, the bigger concern now is if the device's Windows RT operating system is hurting Mr. Softy itself.

The Australian Financial Review is reporting that a Dell (UNKNOWN: DELL.DL  ) executive was warning Microsoft CEO Steve Ballmer about the branding pitfall of calling its mobile operating system for traditional ARM-chip based tablets Windows RT.

Jeffrey Clarke -- Dell's head of its PC business -- said that he told Ballmer that using the Windows name in branding it entry-level platform Windows would confuse buyers into thinking that it could actually run older Windows programs. It can't, and it's why many early adopters have been waiting until a pricier Intel-based Surface comes out early next year running the more compatible Windows 8 Pro.

There's a learning curve here that just isn't getting through to some consumers. The article points out that Microsoft has had to soften its return policy because too many people are returning Surface purchases after assuming that they thought it would be compatible with Microsoft's flagship operating system.

It was already going to be a high hurdle to clear for Microsoft. Apple (NASDAQ: AAPL  ) is the company making the iPad tablets that everyone craves, and Google's (NASDAQ: GOOGL  ) Android is the mobile operating system that's allowing manufacturers to flood the market with cheap gadgetry.

Microsoft's Surface is the worst kind of hybrid. It's as expensive as an iPad, yet it's as indistinguishable as a cheaper Android tablet.

Why did anyone think that it would sell well? Microsoft lacks the ecosystem that Apple's iOS and Android have established over the years. The one unique advantage -- Surface's ability to run the included preview version of an RT-based Windows Office -- isn't as big a selling point as Microsoft probably thought it would be. Why would anyone risk buying into a new operating system that may be nixed sooner rather than later?

However, Windows RT failing wouldn't be a problem limited to arranging a platform's Viking funeral. Confusion would also sting the Windows brand altogether. PC sales have been sluggish since smartphones and tablets took off. If Microsoft's reputation takes a hit here, it will come at the company's most vulnerable moment.

We'll soon now if Surface and Windows RT are flops, but the real pain may be felt by Microsoft for a long time.

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  • Report this Comment On December 18, 2012, at 7:14 PM, vonburkleo wrote:

    Wondering if the author of this articel has actually used a Microsoft Surface for any period of time (not just holding one in a store)? I've had my Surface for a few weeks and I think it's really great. I'm a bit of a gadget nut and we also have an iPad and a Google Nexus 7 (used primarily as an e-reader).

    I think the Surface is better than the iPad in just about every way. The new Windows touch interface is much more modern feeling than iOS (which is really starting to show its age....pretty much no graphical user interface innovation since it came out years ago), the hardware is gorgeous and the ridiculously thin keyboard makes it much more versitile than the Ipad (or Android)....I can actually type more than a quick note - imagine that!

    In fairness, some of my favorite iOS apps are still not on Windows, but many are and I'm sure the rest will be coming soon.

    Anyway, as said at the top, I don't know if the reviewer actually had a Surface or if he is just reapeating what he's heard (which would be a really show pretty poor journalistic skills).

  • Report this Comment On December 18, 2012, at 7:37 PM, TreyAnas wrote:

    I haven't used Surface (and own an iPod), but have seen a lot of quickie reviews of Windows 8 Pro that seem to be based an hour of use. I've been using a Win 8 ultrabook with touch and, though the learning curve was fairly steep, now believe it's terrific. Better than iOS.

    Microsoft is still a favorite whipping boy of the tech press. I don't know if that's the issue here. Could be that the author is just more concerned about the backward-compatibility issue than you are.

  • Report this Comment On December 18, 2012, at 9:18 PM, techy46 wrote:

    Same old commentary about Windows 8 and Windows RT. The only thing keeping a lot of people, like myself, from buying the Surface RT was waiting to see what else was going to be made available from MS and others. It looks like the Surface RT is the best RT device comparing it with Ausu Vivotab and Dell XPS 10. The W8 Pro devices are going to be $100 (Z2760) to $200 (iCore) more. I think MS and others needs to cut $100 off RT devices but won't do so until supply over comes demand. That said, I'm going to buy a Surface RT at Staples after verifying Excel 13 will edit my existing XLS(x) files and my HP printer will work. Once we use it awhile we'll probably get a W8 Pro tablet too but it may be Dell, HP or Lenovo depending in bestr deals. Apple consumers are much more gam and fad driven then MS's seasoned Windows users.

  • Report this Comment On December 18, 2012, at 9:23 PM, TMFBreakerRick wrote:

    vonburkleo, my only experience with the Surface was interacting with it on two separate occasions at the holiday pop-up store near my home.

    Keep in mind I'm basing my concerns on what a Dell executive noted and an unusually high return rate noted by the publication. Whether it's cool or not isn't the problem. It doesn't even matter if it's better than the iPad. McDonald's doesn't sell the best burgers. The issue here is if consumers are confused about what Windows RT means -- and there is anecdotal evidence to suggest that.

  • Report this Comment On December 18, 2012, at 11:38 PM, vonburkleo wrote:

    Maybe I misread. Was this a quote from DELL or your opinion after looking at it in two pop up stores?

    "Microsoft's Surface is the worst kind of hybrid. It's as expensive as an iPad, yet it's as indistinguishable as a cheaper Android tablet."

    Agree that the fact the Surface doesn't run legacy Windows apps may not be understood by the buyer and good for Microsoft for extending their return policy.

  • Report this Comment On December 19, 2012, at 10:22 AM, TMFBreakerRick wrote:

    vonburkleo, no, that quote was my own. The first part -- that it's twice as expensive as many Android tablets and as expensive as an iPad -- is fact. The "indistinguishable" comment is an opinion, though analysts talking down Surface projections and the paper's reported returns and softening of return terms because it's not a TRUE Windows tablet do make it pretty indistinguishable in my opinion.

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