Microsoft Corporation (MSFT) Isn’t Going Far Enough

Microsoft Corporation (NASDAQ:MSFT) can’t seem to take a hint.

Sources are telling Bloomberg that the software giant is slashing prices for hardware manufacturers making small tablets running Windows RT.

Microsoft Corporation (NASDAQ:MSFT)’s scaled-back mobile operating system has been a dud since rolling out late last year. Its own Surface RT has been a flop. I saw it coming. You probably did, too.

Cutting prices for Windows RT licenses is a step in the right direction, but it doesn’t go far enough. Microsoft Corporation (NASDAQ:MSFT) is competing with Google Inc (NASDAQ:GOOG)‘s Android and Apple Inc. (NASDAQ:AAPL)‘s iOS, and it can’t match the ecosystem or developer support of either platform.

Folks aren’t buying Windows 8-fueled tablets in large numbers, but at least there’s some support for a device that is truly compatible with PCs. Windows RT — a costly Android wannabe that trades a lack of app selection for access to a Microsoft Corporation (NASDAQ:MSFT) Office workaround — just isn’t selling at all.

Industry tracker IDC reports that just 200,000 of the nearly 50 million tablets shipped this past quarter were Windows RT devices. When you’re commanding 0.4% of the market, a price cut makes sense. However, tablet makers facing the choice between supporting Google Inc (NASDAQ:GOOG)’s Android for free or paying for Windows RT at any price have a pretty easy decision. It’s not a surprise that so many of the Windows PC supporters in the past have sidestepped Windows RT support in favor of putting out Android tablets.

Forget about charging for Windows RT licenses. Microsoft Corporation (NASDAQ:MSFT) may actually have to pay hardware companies to support Windows RT the way that it has in mobile through its Lumia deal.

The other comical aspect of Microsoft’s half-hearted response is that the price break on Windows RT licenses only applies to small tablets. In other words, Mr. Softy is somehow protecting the pricing integrity of the larger Surface RT, even as it begins to quietly discount those tablets by offering free keyboard covers for buyers in recent days.

What’s the point, Microsoft Corporation (NASDAQ:MSFT)?

Apple Inc. (NASDAQ:AAPL)’s iPad has the high-end, full-sized market cornered. Android has everything else, and it also has companies willing to take a hit on the hardware. We’re not just talking about Google Inc (NASDAQ:GOOG)’s own Nexus line. The Android-propelled Kindle Fire can be had for as little as $159 because Amazon.com, Inc. (NASDAQ:AMZN) wants consumers paying to download books, movies, games, and music through its platform.