Microsoft (NASDAQ: MSFT ) has taken another page out of Apple's (NASDAQ: AAPL ) playbook. Code-named Project Blue, Microsoft is planning to release a lower-priced build of Windows each year, much like the OS X tradition. Although this stinks of iEnvy, the move could actually bode well for Microsoft investors.
Project Blue will be the first major update to Windows 8, which is expected to be available by mid-2013. This release schedule is certainly a divergence from Microsoft's typical timeline, but the intent behind the shift is to further unify the developer kits between the Windows platforms -- phone, RT, and desktop. Going forward, developers will have to only develop one Metro application and it will work across the different platforms. Longer-term, this should make developers happy, but it might upset the ones that have already invested into one segment of the ecosystem.
One (less) Window
The more Microsoft can unify the Windows experience for consumers and developers alike, the better its chances of regaining lost opportunities during the onset of mobile computing. It stands to reason that a component of Project Blue is for Windows Phone 8 to be replaced by Windows RT. The evidence supporting this claim lies within the Surface RT, which is powered by NVIDIA's (NASDAQ: NVDA ) Tegra 3 mobile processor. Since smartphone processors can clearly handle the load of Windows RT, cutting Windows Phone 8 would ease buyer confusion between the three different versions of Windows 8. You'd be left with Windows 8/RT as the Microsoft version of Apple's OSX/iOS. If Apple's model provides any clues, consumers can easily understand the differences between two clearly defined platforms. Eliminating Windows Phone 8 would more clearly define Windows RT as Microsoft's mobile OS.
By changing the Windows release schedule to a yearly basis, Microsoft will be able to better compete against the latest offerings from Apple's OSX. The lower pricing structure could also be an indication that Microsoft wants to put more focus on producing high-margin hardware -- just like Apple. According to IHS, the Surface RT's bill of materials rang in at $287, including the keyboard case, and sells for $599. Project Blue could perhaps be a smaller part of a bigger plan to transform Microsoft into a company more similar to Apple than in the past. They say imitation is the highest form of flattery, and succeeding here could make all the difference for investors of Microsoft's lost decade.
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