Is This the Beginning of the End for Small Windows Tablets?

Lenovo will stop selling its smaller Windows tablets in the US soon -- putting Microsoft's platform in even less hands than before.

Jul 21, 2014 at 10:30AM

Microsoft (NASDAQ:MSFT) has had a rough transition into tablets over the past few years, but things had started to turn around as of late. The company recently launched its Surface Pro 3, to generally positive reviews. But the announcement last week that Lenovo will discontinue selling Windows 8-inch tablets in the US points to a larger problem with the platform -- there's not much demand for a small Windows tablet.

Not quite the nail in the coffin
Lenovo makes two 8-inch Windows tablets for the US, and will now send those inventories to other countries. IT World said Lenovo is dropping US sales of smaller Windows tablets because there isn't demand for them. Considering Lenovo is the third-largest tablet vendor in the US, it's not as if the company's decision will sink the Windows platform on tablets. But it does bring into question the viability of Windows on smaller displays.

Lenovo's decision comes a few months after Microsoft started giving away the Windows 8 and Windows Phone platforms for free, on screens smaller than 9-inches. Microsoft wants to spur companies to make mobile devices with their OS, but Lenovo's latest move shows this may not be working for the small tablet segment.

More small tablets doubts
When Microsoft released the new Surface Pro 3 in May the company notably didn't launch a smaller version of the tablet. It was a bit of a surprising move considering Apple (NASDAQ:AAPL),, and a myriad of Android tablets already exist in that segment.

But Microsoft may be avoiding a slowing smaller tablet market. Data released earlier this month from NPD DisplaySearch shows that many tablet vendors are moving to larger form factors as competition has increased. NPD said phones larger than 5.5-inches are competing with tablets smaller than 8-inches and it expects that competition to reduce demand for tablet PCs through 2018."

The research firm said the unit share of 7 to 7.9-inch tablets peaked at 58% in 2013, but will decline from now on. "Major brands are likely to move to larger sizes, and shipments of 8-10.9" tablet PCs will overtake 7-7.9" tablet PCs by 2018," NPD said.

Though this trend impacts all tablet makers, it may prove more troubling for Microsoft.

The bigger implications for Microsoft
The real problem for Microsoft is that it already has a small portion of tablet market share, and any drop from lack of small tablet sales is bad news.

According to Statista, Microsoft currently only holds 5.8% of worldwide tablet OS market, and having another major vendor drop two small Windows tablets from its lineup doesn't help them grow that percentage.

Apple just announced a partnership with IBM to tackle the enterprise market head on, which could boost Apple's tablet sales even higher. As part of the deal, IBM will work with Apple to create enterprise apps and services, as well as sell Apple's iPads and iPhones directly to enterprise customers.

Though Microsoft just started making its Office suite available on the iPad, the company has a lot to lose from Apple gaining more ground in the enterprise market. I'd argue that any US vendor dropping any size Windows-based tablet is a very bad thing for Microsoft. The company needs all the market share it can get and the combination of losing a major vendor, plus Apple's aggressive enterprise push, will continue to stifle Microsoft's tablet ambitions.

Apple's other device launch
Aside from two new iPhone form factors, Apple is expected to launch a wearable device this fall as well. While Samsung, LG, and soon Apple, are knee-deep in wearables there's another way for investors to benefit from this new tech trend. In our new, free report, The Motley Fool highlights one stock that makes wearable tech possible. To find out this company, and how to invest in wearable technology, just click here.

Chris Neiger has no position in any stocks mentioned. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple, International Business Machines, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

1 Key Step to Get Rich

Our mission at The Motley Fool is to help the world invest better. Whether that’s helping people overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we can help.

Feb 1, 2016 at 4:54PM

To be perfectly clear, this is not a get-rich action that my Foolish colleagues and I came up with. But we wouldn't argue with the approach.

A 2015 Business Insider article titled, "11 websites to bookmark if you want to get rich" rated The Motley Fool as the #1 place online to get smarter about investing.

"The Motley Fool aims to build a strong investment community, which it does by providing a variety of resources: the website, books, a newspaper column, a radio [show], and [newsletters]," wrote (the clearly insightful and talented) money reporter Kathleen Elkins. "This site has something for every type of investor, from basic lessons for beginners to investing commentary on mutual funds, stock sectors, and value for the more advanced."

Our mission at The Motley Fool is to help the world invest better, so it's nice to receive that kind of recognition. It lets us know we're doing our job.

Whether that's helping the entirely uninitiated overcome their fear of stocks all the way to offering clear and successful guidance on complicated-sounding options trades, we want to provide our readers with a boost to the next step on their journey to financial independence.

Articles and beyond

As Business Insider wrote, there are a number of resources available from the Fool for investors of all levels and styles.

In addition to the dozens of free articles we publish every day on our website, I want to highlight two must-see spots in your tour of

For the beginning investor

Investing can seem like a Big Deal to those who have yet to buy their first stock. Many investment professionals try to infuse the conversation with jargon in order to deter individual investors from tackling it on their own (and to justify their often sky-high fees).

But the individual investor can beat the market. The real secret to investing is that it doesn't take tons of money, endless hours, or super-secret formulas that only experts possess.

That's why we created a best-selling guide that walks investors-to-be through everything they need to know to get started. And because we're so dedicated to our mission, we've made that available for free.

If you're just starting out (or want to help out someone who is), go to, drop in your email address, and you'll be able to instantly access the quick-read guide ... for free.

For the listener

Whether it's on the stationary exercise bike or during my daily commute, I spend a lot of time going nowhere. But I've found a way to make that time benefit me.

The Motley Fool offers five podcasts that I refer to as "binge-worthy financial information."

Motley Fool Money features a team of our analysts discussing the week's top business and investing stories, interviews, and an inside look at the stocks on our radar. It's also featured on several dozen radio stations across the country.

The hosts of Motley Fool Answers challenge the conventional wisdom on life's biggest financial issues to reveal what you really need to know to make smart money moves.

David Gardner, co-founder of The Motley Fool, is among the most respected and trusted sources on investing. And he's the host of Rule Breaker Investing, in which he shares his insights into today's most innovative and disruptive companies ... and how to profit from them.

Market Foolery is our daily look at stocks in the news, as well as the top business and investing stories.

And Industry Focus offers a deeper dive into a specific industry and the stories making headlines. Healthcare, technology, energy, consumer goods, and other industries take turns in the spotlight.

They're all informative, entertaining, and eminently listenable ... and I don't say that simply because the hosts all sit within a Nerf-gun shot of my desk. Rule Breaker Investing and Answers contain timeless advice, so you might want to go back to the beginning with those. The other three take their cues from the market, so you'll want to listen to the most recent first. All are available at

But wait, there's more

The book and the podcasts – both free ... both awesome – also come with an ongoing benefit. If you download the book, or if you enter your email address in the magical box at the podcasts page, you'll get ongoing market coverage sent straight to your inbox.

Investor Insights is valuable and enjoyable coverage of everything from macroeconomic events to investing strategies to our analyst's travels around the world to find the next big thing. Also free.

Get the book. Listen to a podcast. Sign up for Investor Insights. I'm not saying that any of those things will make you rich ... but Business Insider seems to think so.

Compare Brokers