What Will Be the Fate of Microsoft’s Windows RT?

While it already seemed like Microsoft (NASDAQ:MSFT) was in troubled water with Windows 8, it might be a bit worse with the more basic Windows RT. But that may be changing.

Windows 8 was the successor of Windows 7, and it has been widely criticized for being too different from older versions of Windows. One of the most notable things complained about was the omission of the traditional Start menu, which was replaced by a screen-full of “tiles” that act as shortcuts to programs. The new system might be more visually engaging, but they also offered a learning curve that many people didn’t desire, as they were quite comfortable with what they knew about Windows from the past.

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Windows RT is the more streamlined version; it also features the tiled menu, and was designed for devices that run on chips using Arm Holdings Plc’s (NYSE:ARM) architecture. The ARM architecture has been popular in mobile devices, as it is not overly consumptive of battery power. For Microsoft to breach the tablet market, designing for ARM seemed like a must.

Unfortunately for Microsoft, competition from other tablet makers was intense, and consumers didn’t seem to know enough about Windows RT to build up any demand for it. This not only meant that sales of the devices weren’t good, but also that original equipment manufacturers were going to be a little more careful around Windows RT.

Hewlett-Packard (NYSE:HPQ), the world’s largest PC manufacturer, doesn’t seem interested in making a Windows RT device, as it has no plans to do so. HTC had plans to make a large Windows RT tablet, but changed its mind after seeing the demand, according to people familiar with the matter. Samsung had developed an RT tablet, but decided not to launch it in many places, and it may not come out with a follow-up device. Acer announced two new tablet models Monday, but neither would use Windows RT. Toshiba had two Windows RT prototypes but canceled them in August.

Last year, Asustek unveiled a Windows RT device, but when it released a number of products on Monday, none feature the operating system. One device had Windows 8 and another had Android. One even had both Windows 8 and Android together, but Windows RT was nowhere to be found.

Microsoft may still have a friend in Dell (NASDAQ:DELL), which is working on a tablet with the operating system, and HTC, which may have canceled plans for a larger tablet but still has plans for a 7-inch RT tablet. Microsoft has a plan to keep those friends and maybe bring back some more at the same time.

One plan is to train retailers. According to Dell, customers are satisfied with Windows RT, but not a lot of potential customers know enough about the operating system to build up the demand necessary for success. If Microsoft makes retailers more aware of Windows RT and better able to explain it to customers, the operating system could see a change in its marketplace performance.

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Another plan is to cut the price Microsoft charges for Windows RT on small devices. It’s not clear how much Microsoft will cut the price by, but people familiar with the matter say the company will make a cut. This could give manufacturers added incentive to use the operating system in their devices. HTC would benefit from the discount in the 7-inch tablet that it is making. Additionally, the discount can be passed down to the consumer in the form of lower device prices, which may quickly boost sales.

There is one other point of hope for Microsoft in the tablet market, and that’s from Intel (NASDAQ:INTC). When Microsoft first developed Windows RT, Intel’s chips weren’t quite ready to be used in tablets because of their high power needs; thus it was critical that Microsoft have software that would run on the ARM architecture. However, Intel is now getting out chips that consumer less power and could be better implemented in mobile devices. This would allow Microsoft to just sell Windows 8 tablets without having to worry too much about the success of Windows RT. For now, Windows RT may still receive some attention from Microsoft, but as Intel chips become more and more mobile-worthy, attention may shift to Windows 8 alone.

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