Windows RT – White Elephant

Windows RT has no future. If only Microsoft could see that.

• The latest round of disclosures reveal what a disaster Windows RT is adding further weight to the notion that it should be killed off.
• In its end of year filing, Microsoft disclosed that it has sold just $853m of its Surface line of tablets. (page 28 10K)
• This number appears to include both the Windows RT version and the Windows Pro version.
• This suggests that Microsoft has sold a total of slightly more than 1m units of both devices combined.
• In reducing its existing Surface RT inventory by $150 per unit, Microsoft managed to wipe out more value ($900m) than both product lines managed to generate in revenues in a whole year.
• To add salt to the wound, Asustek has joined Samsung in halting development of Windows RT devices.
• I suspect that these two are not alone and that it will be Microsoft alone that carries this white elephant into 2014.
• The problems with Windows RT are fourfold:
  • It looks like Windows 8 but the user can’t install anything on the desktop creating confusion and mistrust.
  • Many of the classic applications expected on a tablet are missing.
  • The devices are underpowered creating a poor user experience.
  • The devices are too expensive compared to the iPad and other tablets even after the recent round of reductions.
• This combined with poor coverage when it comes to applications that users expect to be on tablets means that RT has no future.
• What Microsoft needs to do is to make full Windows 8 run on ARM.
• Then users can choose a Windows 8 device that they know will have full functionality.
• The choice should be made on the basis of price, performance and battery life alone.
• If this can be achieved (I am not optimistic) then ARM has a chance to grab some share in the PC market.
• If things stay the way they are (and I can see no change before mid-2014) then ARM has no chance and estimates need to be cut.
• Windows RT has been a very expensive experiment but it is time for Microsoft to cut its losses before they become crippling.
• This is great news for Intel as its chips are closing in on ARM and its Windows 8 tablets are the only ones to buy (and the only ones the OEMs are making).
• I like Microsoft as it is cheap, has great assets and has recently said exactly what I want to hear in its recent strategy announcement.
• However, its unwillingness to admit its blunders and long legacy of poor management fill me with doubt as to whether this miracle can be pulled off.
• I prefer Nokia.