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Nokia's (NYSE: NOK ) upcoming Lumia 2520 is a Windows RT tablet sporting a 10.1-inch display. When Nokia's hardware becomes a part of Microsoft (NASDAQ: MSFT ) , it will be the second Windows RT tablet the company has offered. Still, despite Nokia's offering, Windows RT faces immense challenges. Most of Microsoft's OEMs, including Samsung (NASDAQOTH: SSNLF ) , have shunned the operating system.
The difference between Windows RT and Windows 8
Aesthetically, Microsoft's two operating systems -- Windows RT and Windows 8 -- are indistinguishable; under the hood, they couldn't be more different. Microsoft's Windows 8 is a full-fledged PC operating system, capable of running virtually any piece of software written for the broader PC platform. Windows RT, on the other hand, is limited -- it can run only mobile apps and a watered-down version of Microsoft Office.
Windows RT, then, is Microsoft's version of Apple's iOS and Google's Android. But unlike those competing platforms, Windows RT lacks a robust app ecosystem -- Microsoft's app store is still missing a number of popular apps, including LinkedIn, Pinterest, and HBO Go. Even Facebook didn't arrive until earlier this month.
One might argue that these apps are superfluous -- there are browser-based alternatives for all of them. But according to research firm Flurry, 80% of the time users are on mobile devices, they're using apps. Clearly, the touch-optimized interface is important.
Perhaps that's why Microsoft's efforts to sell its Surface tablet have come up short. Microsoft hasn't released exact sales numbers, but in July, GeekWire estimated that Microsoft had sold just 1.7 million tablets from last October through June. When Microsoft reported earnings last week, it said that sales of the Surface had doubled, but even still, the $400 million in revenue it generated paled in comparison with the $6 billion Apple brought in selling iPads last quarter.
A camera, cellular connectivity, and a paint job
Outside of a better camera and a different paint job, Nokia's upcoming tablet isn't noticeably different from the second version of Microsoft's Windows RT tablet, the Surface 2. Both tablets are similar in size, weight, and screen resolution. They both have covers that double as keyboards, and about the same battery life.
Nokia's 2520 has a better rear-facing camera, and its Lumia handset-like body might be more visually appealing than Microsoft's Surface 2, but buyers who go with Nokia's option will have to fork over an additional $50. That extra $50 includes LTE connectivity; in fact, Nokia has said it will sell the device through wireless carriers. That's a big distinction, but it's unlikely to be a major selling point -- the vast majority of tablets sold in the U.S. are Wi-Fi-only.
Microsoft's partners have stayed away
The most notable thing about the Lumia 2520 is that Nokia would even consider making it: All of Microsoft's hardware partners have shunned the operating system. Asus and Dell released Windows RT tablets, but both companies have abandoned them, citing poor sales.
Samsung sold a Windows RT tablet in Europe but then discontinued it and never brought it to the United States. Samsung went further, blaming Microsoft for the failure of its mobile operating system, and telling CNet that the consumer was confused. According to Samsung, the company still had to do "heavy lifting" to explain Windows RT to consumers.
Despite Samsung's criticism, the company still offers Windows tablets -- but only tablets running full Windows 8. In fact, the Windows tablets that Samsung does sell helps to illustrate the broader problem with Windows RT -- for about the same price as Nokia's 2520, a consumer can purchase Samsung's ATIV Smart PC 500T. With full Windows 8, Samsung's tablet isn't hobbled by the limitations of Windows RT.
The future of Windows RT
Even with Nokia offering another Windows RT tablet, Microsoft's mobile operating system remains immensely challenged. Sales of Windows RT devices have been poor -- poor enough to scare away all of Microsoft's hardware partners.
With limited app support, and Microsoft's hardware partners like Samsung offering full Windows 8 tablets at competitive prices, the future of Windows RT remains bleak. Investors shouldn't expect Nokia to sell many Lumia 2520s.
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