Is Microsoft Windows RT About to Lose a Key Partner?

Microsoft (NASDAQ: MSFT  ) needs all the help it can get with the launch of its three newest platforms: Windows 8, Windows Phone 8, and Windows RT. The last, in particular, is the most confusing for consumers, because the interface looks nearly identical to Windows 8, yet its functionalities are quite different.

Windows RT is the lightweight version of the operating system that runs on ARM-chips, and Samsung has devices carrying Qualcomm (NASDAQ: QCOM  ) Snapdragons inside. Windows RT only works with apps downloaded from the Windows Store. In comparison, Windows 8 runs on traditional x86 processors primarily from Intel (NASDAQ: INTC  ) , and supports all the familiar legacy applications. The problem is that many average consumers may not know that distinction.

That's why Samsung, one of the most important hardware partners for any software maker to collaborate with, is bailing on its plans to bring Windows RT devices to the U.S.

Mind carrying this for me?
CNET reports that Samsung took a number of factors into consideration. First off, feedback from retail partners showed that there was a certain lack of interest in Windows RT devices. Combined with the fact that there's a lot of consumer confusion about the platform, Samsung felt that there was "a lot of heavy lifting we still needed to do to educate the customer on what Windows RT was."

And, by "heavy lifting," Samsung exec Mike Abary meant it was going to take a bunch of money that the company didn't feel was worth investing. That's especially true because Microsoft hasn't exactly been carrying its own weight in the education department, and it should have been doing most of the heavy lifting, anyway.

Just weeks before the launch of Windows 8 and Windows RT, Microsoft sales reps still weren't adequately trained on how to explain the differences to potential buyers. The Verge went on the Microsoft Store website pretending to be an average consumer, and chatted up numerous reps who failed to properly explain how different the platforms truly are.

The Verge: What's the difference between Windows 8 and Windows RT, or are they the same thing?

Microsoft rep: They're pretty much the same thing, there is no real huge difference beside the RT is more touch friendly.

This was just days before launch, and even sales reps at Microsoft retail stores didn't fare much better. Needless to say, they're not pretty much the same thing, and there is a huge difference. Microsoft has a page buried on its website outlining the differences, but how many people will unearth it, compared to how many stroll into a physical Microsoft Store?

Wait and see
Abary also said that Samsung was going to have to make certain trade-offs to keep its Windows RT tablets competitive -- trade-offs it didn't want to make. Windows RT devices cost less, in part because ARM chips cost less than Intel processors; but all tablets are inevitably compared to Apple's iPad that starts at $499 for the newest models.

Abary added, "We didn't necessarily attain the price point that we hoped to attain." That's not Microsoft's fault, according to Samsung, but it is what it is.

It's a little ironic that Steve Ballmer was displaying a Samsung-built Windows RT device with a Snapdragon just this week when he made a surprise appearance at Qualcomm's CES keynote. Samsung's not scrapping the devices altogether, and it didn't specify its plans for outside of the U.S., but it wants to wait and see where the RT market goes before jumping in.

Winners and losers
Intel is a clear winner here, because it will continue to maintain its hegemony within the Windows PC market (which is shrinking). Microsoft's Surface Pro, which runs on an Intel chip, is due out later this month starting at $900. It's a tough break for Qualcomm, as Windows RT has been its best shot at tapping the tablet market, while it has little to no traction in Google Android tablets.

Other ARM-chip makers may similarly be disappointed if the broader Windows RT market fails to develop. That would include NVIDIA, whose Tegra 3 is in Microsoft's current Surface RT, which had a "modest start."

Windows RT was the ARM army's hope at cracking into PCs, but it doesn't look like they're going to have much of a chance.

It's been a frustrating path for Microsoft investors, who've watched the company fail to capitalize on the incredible growth in mobile over the past decade. However, with the release of its own tablet, along with the widely-anticipated Windows 8 operating system, the company is looking to make a splash in this booming market. In this brand-new premium report on Microsoft, our analyst explains that, while the opportunity is huge, the challenges are many. He's also providing regular updates as key events occur, so make sure to claim a copy of this report now by clicking here.


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  • Report this Comment On January 12, 2013, at 10:46 AM, SeldomSeenSlim wrote:

    So many miss the point of Surface RT (and perhaps Microsoft should be included in that camp also...LOL), the real player in the tablet arena is Surface Pro. There may be some narrow niche for Surface RT but why bother with Pro on the way, full Windows compatibility, classic desktop as well as the tiled interface, use it as a tablet, laptop or desktop. Goodbye IOS and Android, nolo contendere.

  • Report this Comment On January 12, 2013, at 3:29 PM, ezm wrote:

    I don't think that just because Samsung doesn't want to support Windows RT means that MS is losing a partner. Doesn't Samsung still produce Windows smartphones, tablets and laptops?

  • Report this Comment On January 12, 2013, at 3:38 PM, ezm wrote:

    sorry, re-read the title and see that it says "Microsoft Windows RT About to Lose a Key Partner".

    I still don't see that as a big deal.

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