Recent estimations put Microsoft (NASDAQ: MSFT ) Windows RT selling at an anemic rate of only 50,000 units per month. For a company the size of Microsoft, this is doing next to nothing to its bottom line, not to mention it's tarnishing the Windows 8 franchise with added confusion for consumers. Given the fact the Intel (NASDAQ: INTC ) is on the verge of releasing a tablet processor based on a 22-nanometer design, it's almost all but certain that Windows RT will eventually become a thing of the past. In the video, Motley Fool contributor Steve Heller discusses why he believes Windows RT needs to die and where he wants Microsoft to focus its efforts.
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 April 10, 2013, at 9:14 AM, SSchlesinger wrote:
Windows RT was a bet made by Microsoft a few years ago with the best information that they had at the time. They saw the massive explosion in the sales of smartphones and tablets powered by ARM processors. They also saw that these little systems were rapidly reaching the minimum hardware requirements to run Windows. Thus at the time it looked like a wise idea to release an ARM based operating system since the market appeared to be heading that way. They started the development of Windows RT.
In that time we saw big players like HP and Blackberry come out with their own versions of ARM based tablets, and fail. HP's WebOS was actually a very decent operating system but HP put the death nail in it six months after it was launched. Every ARM based Android tablet has struggled with sales as compared to the Apple iPad. Things may change when the Kindle Fire goes on sale for $99 this holiday season.
The largest problem Microsoft has in this space is providing a large enough carrot to lure people in. I think a $199 price tag for the Surface tablet with $200 app and music credit would excite people to buy this system. Yes, they would have to literally buy their way into the market. But it would also excite developers to write more Metro apps.
Microsoft would have to take huge, mind boggling losses on the entire franchise just to give the project enough legs to last a certain number of years. But in the end ARM may not win it's battle to keep pace with Intel on the manufacturing front and Microsoft would be supporting a technology that is technically behind Intel.
It's time for Microsoft to admit that they made a very good "B Plan" with Windows RT but as it turned out the market didn't head that way. The iPads and iPhones didn't sell because of the wonderful qualities the ARM processor brought to the table. It sold because of Apple. Android got a leg up at a critical time because AT&T's competitors had to sell something similar to the iPhone. Windows Phone was nowhere to be found at the time.
I agree, put the death nail into the coffin of RT. Intel has done a far superior job of playing catch up than Microsoft has and Microsoft needs to funnel its resources to making their legacy Windows programs appealing for the next generation mobile devices to come out. They've tested the waters long enough, and RT will never really take off. Right now RT is a money losing proposition, the question is now, when do they cut their losses?
What a difference a few years makes.
Report this Comment On April 10, 2013, at 1:39 PM, ViewRoyal wrote:
Microsoft has basically cornered themselves with Windows RT.
Even though Windows RT hasn't been a sales success, if they pull the plug on it now, Microsoft's future business would be severely damaged.
If only 1 Million people bought into RT and the fairly expensive hardware it uses, dropping this OS and tablet hardware in the first year, or even in the first 3 years, would cause RT consumers to launch a class-action lawsuit against Microsoft. This would result in huge costs for Microsoft both in the compensation they would end up paying, and in the loss of public confidence in the company's products.
Also, since Microsoft has spent Billions of dollars in the development of Windows RT, hardware design and manufacturing, and in advertising, Microsoft would never be able to recoup those costs. The loss would be a major stain on Microsoft's reported revenues.
And investors would also lose confidence in the company, leading to further drops in the price of MSFT.
Report this Comment On April 12, 2013, at 3:41 AM, chickenla wrote:
ViewRoyal, whata load of sensationalism you got there going for you. M$ has no legal obligation to continue to support or develop any product they do not wish to, nor does any company for that matter. Class-action lawsuit? don't kid yourself. Wouldn't be the first time someone gets gouged out of their money into shoddy product. Loss of public confidence? You realize this is Microsoft we're talking about right?
And billions in R&D and marketing? You'll probably only need to sell tablets @ 10k a piece to break even with that outrageous budget. Vapor-ware/Abadonware is not uncommon at all and to these companies, it's just a small bump on the road.
On topic: No way M$ would want to kill RT. ARM is the better choice to back your platform in atm. x86 is only starting to catch up with arm in terms of power efficiency and is still an experiment. I have high hopes AMD Temash will be something worthwhile but there's still long ways to go for x86.
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