The End of Windows RT Is Near

Microsoft (NASDAQ: MSFT  ) currently has three different Windows operating systems. There's Windows 8, which includes both the legacy desktop as well as the new tile-based home screen and runs all legacy Windows applications. There's Windows Phone, an ARM-based OS which is meant for smartphones. Then, there's Windows RT, which attempts to straddle a middle ground that doesn't actually exist. Windows RT has proven unpopular and confusing to consumers, and it seems that its death is now all but inevitable.

Straight from the horse's mouth
I was somewhat shocked when Microsoft decided to release a second version of its Windows RT tablet, the Surface 2. The company had taken a $900 million writedown on the first version, and there was almost no demand for the original device. OEMs all but abandoned Windows RT, favoring using the full version of Windows 8 instead.

It seems that Microsoft has finally gotten the message. Earlier this month, the head of Microsoft's devices and services division essentially signed a death warrant for Windows RT:

"We have the Windows Phone OS. We have Windows RT and we have full Windows. We're not going to have three."

The obvious takeaway from this quote is that Windows RT will eventually be killed off, or possibly merged with Windows Phone, as both run on the ARM architecture. In this second scenario, Windows 8 will be reserved for PCs, laptops, and larger tablets suitable for the Windows desktop, while the Windows Phone/RT hybrid will be used in phones and smaller tablets. This strategy makes a lot more sense than the three-pronged approach currently being employed.

Windows RT can't compete with...Windows
The fundamental problem with Windows RT is that it can't run any applications written for the full Windows operating system. This would be fine if Windows RT devices were dramatically less expensive, but with Intel's (NASDAQ: INTC  ) recent release of its Bay Trail processors, the price gap is non-existent.

Dell has released an 8-inch tablet, the Venue 8 Pro, running the full Windows 8 operating system and retailing for just $299. Asus recently released the Transformer Book T100, a tablet with a detachable keyboard, which retails for just $399. At those prices, it's hard to imagine why anyone would opt for a Windows RT device. Especially considering that both the Dell and Asus devices include a free copy of Microsoft Office.

The big advantage that Windows tablets and convertibles have over Android devices and the iPad is the fact that they can run all of the applications that run on desktops and laptops. Windows RT eschews this advantage, and in the process renders itself useless.

Addicted to Intel
There's a problem with killing off Windows RT right away, however. Windows 8 requires an x86 processor, and Intel is really the only option at this point for mobile devices. Intel's Bay Trail processors offer solid performance and long battery life, with the Asus T100 mentioned above topping 11 hours. Rival AMD (NYSE: AMD  ) has no competitor right now, and Microsoft could be reluctant to completely rely on Intel for its tablet strategy.

AMD does have plans to get into the mobile game, however. Next year, the company plans to launch a line of chips that are efficient enough to be used in mobile devices, codenamed "Mullins." Once this happens, Intel will no longer have a monopoly on Windows 8 tablets, and Microsoft may feel comfortable leading Windows RT off to slaughter.

Intel should be out with the next Atom iteration next year, Cherry Trail, so AMD will be playing a serious game of catch-up. AMD does have an advantage when it comes to graphics, though, since the company owns ATI and integrates that graphics technology into its chips. This competition will likely mean lower prices for consumers, and more Windows licenses for Microsoft.

The bottom line
Windows RT has no real place in the market, and I suspect that the OS will be killed off once AMD offers an alternative to Intel. Perhaps Windows RT was meant to send a message to Intel and AMD, showing that Windows can run on the ARM architecture without them, compelling the companies to focus on low-power chips. Or perhaps Windows RT was simply the result of a terrible decision. In any case, its days are numbered.

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