Nokia (NYSE:NOK) and Microsoft (NASDAQ:MSFT) have gotten awfully cozy over the past few years, what with Nokia now selling four out of every five Windows Phones. Any company hoping to ride mobile adoption knows that smartphones and tablets go hand in hand, yet Nokia has yet to launch a tablet. What's the hold up?
Rumors surfaced in December that Nokia was in the process of building a Windows RT tablet that was expected to launch in 2013, which would compete directly with Surface RT. The rumored tablet was supposed to have the same 10.1-inch display, and include a keyboard cover with an integrated battery that clicks in to place -- much like Surface RT.
Well, we're now halfway through 2013, and there's been no sign of a Nokia tablet running Windows RT. It seems that Nokia has already axed the device, and images of the cancelled tablet have now leaked on the Internet, seemingly confirming the device's existence. The device supposedly ran on an NVIDIA Tegra 3 processor, an interesting choice since Nokia has an existing supplier relationship with Qualcomm because Snapdragons power all Windows Phones.
The Verge's sources say that Nokia abandoned the idea and is instead planning to build a tablet running Windows 8, the full-featured version of Microsoft's new platform. Assuming the reports are accurate, that's definitely the right call on Nokia's part.
Windows RT's existence is highly controversial among consumers and OEMs alike. Consumers are confused as to its value proposition, which causes OEMs to shun the neutered platform. Hewlett-Packard already bailed on the idea of launching a Windows RT device. Samsung tested Windows RT in Europe before a possible U.S. launch, which didn't go so well, and the South Korean giant discontinued sales in most European countries.
Nokia would have made a costly mistake launching a Windows RT device at a time when it needs to save cash. A Windows 8 tablet has a much better shot at success, and Nokia knows it should go all the way instead of settling for Windows RT.
Fool contributor Evan Niu, CFA, owns shares of Qualcomm. The Motley Fool recommends NVIDIA. The Motley Fool owns shares of Microsoft and Qualcomm. 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.