Windows RT Woes: HTC Scraps Tablet

Tablets are cannibalizing PC sales -- but while iOS and Android feast, consumers have left Windows RT to starve. Can Windows 8.1 save Microsoft's lightweight OS?
10 Ways Microsoft Could Improve Surface Tablets
10 Ways Microsoft Could Improve Surface Tablets
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HTC reportedly has scrapped plans to produce a 12-inch Windows RT tablet, adding to not only a growing list of cancelled WinRT projects but also a chorus of unsupportive remarks from Microsoft OEMs.

Bloomberg reported HTC's new intentions, citing unnamed sources who said demand for Windows RT products is too weak to justify the original plan. The source said the company will still release a 7-inch tablet that runs the lightweight Microsoft OS. Windows RT includes Windows 8's touch-oriented Modern UI but, unlike the full version, is not compatible with legacy x86 applications.

HTC's evident lack of confidence in Windows RT is only the latest sign of dissonance between Microsoft and its partners, many of which have already questioned Microsoft's Windows 8 strategy.

[ Can Microsoft pull off Windows 8? Read 5 Windows 8 Gripes Microsoft Must Address. ]

Acer CEO JT Wang warned Microsoft last August, for example, to "think twice" before releasing its Surface products. Wang's comments can be read less as a criticism of Windows 8 than resentment that Microsoft is muscling into hardware sales, of course, but even after Surface underwhelmed, the Acer exec carried his assault into 2013, unfavorably comparing Win8 devices to Chromebooks last January. In early May, he said that the current version of Windows RT offers no value, though he alluded somewhat optimistically to Microsoft's upcoming Windows 8.1 update.

Whereas Wang's criticism has been vocal, other OEMs have expressed their positions through action. Samsung, for instance, has terminated WinRT devices for both the U.S. and German markets.

To an extent, OEMs' hesitancy to take a chance on Windows RT is part of a natural, but nonetheless tectonic, shift in the personal computing space. PCs remain essential for many enterprise tasks, but businesses are still buying tablets because the new devices enable uses -- such as mobile retail -- that traditional machines cannot provide. Among consumers, meanwhile, tablets are quickly becoming the preferred form factor for common tasks such as email, social media and Web surfing.

Buyers of all stripes, in other words, have more options than ever -- not just tablets, but also Chromebooks and other experiments, such as Acer's upcoming Android-based all-in-one PC. This condition leads to two inevitable conclusions: new, upstart devices will usurp market share from the old guard, and some of the emerging platforms won't survive as the market becomes more competitive.

Unfortunately for Microsoft, Windows RT is falling into the second category. The recent trend toward smaller tablets would seem to favor the OS, which, despite offering a version of Microsoft Office, is much more consumption-oriented than the full edition of Windows 8. Even so, Windows RT's market share is virtually nonexistent. Microsoft's Surface RT model has been a notorious flop, and Dell's RT-based tablet evidently isn't doing much better, judging from its recently slashed price.

IDC analysts have suggested Microsoft might be better off yanking RT altogether. ARM chipmakers such as Qualcomm, on the other hand, have supported Windows 8 RT -- but their optimism is somewhat subverted by the stake they share in RT's future. Unlike Windows 8, which runs on Intel's Atom and Core chips, Windows RT was designed for ARM processors.

Regardless of the feelings of manufacturers and consultants, Windows RT has, most crucially, failed to entice consumers. Poor device sales have implied as much, and a recent study supplied more evidence, concluding that Windows 8 users, even those with tablets, have little use for Modern UI apps. Given that these apps constitute the bulk of the Windows RT experience, it's clear Microsoft has a problem.

On Thursday, when Microsoft finally disclosed Windows 8.1 details, desktop-oriented issues -- such as whether users will accept a Start button that doesn't include a familiar Start menu -- took most of the attention. But the company also revealed changes that will affect RT users, such as revamped core apps and deeper SkyDrive integration.

Such small tweaks are unlikely to make a difference, but they demonstrate that RT is still a work in progress. Until Microsoft shows its full hand, it's premature to dismiss the OS as a lost cause. Even so, Windows RT's path to success is uncertain. Upcoming Intel-based ultrabooks and tablets are expected to boast battery lives that rival ARM-based models. Some of them also will be not only cheaper than the Surface RT but perhaps even as cheap as the iPad Mini. All of these Intel-based models will run the complete OS, making it difficult to see why anyone would pay comparable, let alone greater, sums for the watered-down RT version.

Friendlier Windows 8 pricing likely means that Windows RT prices will come down too, of course. Factors such as device size and quality are not irrelevant, either. But until new RT devices -- perhaps including a new Surface -- appear this summer, it will remain to be seen how low Microsoft and its OEMs will need to go.

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