Microsoft Corporation (MSFT): Windows RT Inches Closer to the Graveyard

Whenever Microsoft Corporation (NASDAQ:MSFT) seems to venture too far from its comfort zone, it usually ends poorly for Team Redmond. Windows RT has been no different. Between the underwhelming sales response, loud criticism, and added price cuts, it’s become clear that Microsoft Corporation (NASDAQ:MSFT) isn’t winning over the world with the idea of Windows RT. In what appears to be an effort to clear out existing inventory to make room for a product refresh, the company reduced the price of the 32 GB Surface RT tablet by $150 to a more palatable $349. Unfortunately, that price doesn’t include the innovative keyboard Touch Cover, which will cost another $100 as long as it’s bundled with a Surface RT tablet.

It’s believed that Surface RT version 2.0 will be powered by a QUALCOMM, Inc. (NASDAQ:QCOM) Snapdragon 800 processor, which has built-in 4G connectivity and is twice as fast as the NVIDIA Corporation (NASDAQ:NVDA) Tegra 3 powering the current Surface RT. Coupled with an updated version of Windows RT, the hope is that users will find more utility out of the crippled ecosystem, despite it lacking backwards compatibility with millions of legacy Windows applications.

Lipstick on a pig
Call me old fashioned, but a product refresh alone isn’t going to address the structural issues associated with Windows RT. Additionally, the future Surface RT will be competing with tablets powered by Intel Corporation (NASDAQ:INTC)‘s upcoming Bay Trail processor, which is expected to be featured in devices starting in the $200 to $300 price range and will be capable of running the full version of Windows 8. Additionally, Bay Trail has absolutely smoked the ARM Holdings plc (ADR) (NASDAQ:ARMH) competition, outperforming the ARM-leading Snapdragon 800 by 44%. Outside of pride, there’s little reason for Microsoft Corporation (NASDAQ:MSFT) to continue supporting Windows RT.

Mr. Softy’s best foot forward
At the time, Windows RT made a whole lot of sense. Microsoft Corporation (NASDAQ:MSFT) was late to the game with mobile computing and Windows RT allowed it to address the growing demand for ARM computing devices. However, with Intel Corporation (NASDAQ:INTC) finally catching up with its ARM counterpart, it’s become increasingly clear that Windows RT will be a bridge product thanks to its lack of backwards compatibility.

This may be a tough pill for Microsoft Corporation (NASDAQ:MSFT) to swallow, but if it wants the Surface family to be successful with everyday users, perhaps it should consider dropping Windows RT altogether and introduce a “Surface Atom” powered by Bay Trail. Not only would this move eliminate the frustration and confusion surrounding Windows RT, it would create a clear defined line between itself and the Surface Pro, which would be powered by Intel Haswell and geared toward business use.

Those are my two cents. What do you think? Drop a comment in the box below.

Fool contributor Steve Heller owns shares of QUALCOMM, Inc. (NASDAQ:QCOM) and Intel Corporation (NASDAQ:INTC). The Motley Fool recommends Intel and NVIDIA Corporation (NASDAQ:NVDA). The Motley Fool owns shares of Intel Corporation (NASDAQ:INTC), Microsoft Corporation (NASDAQ:MSFT), and QUALCOMM, Inc. (NASDAQ:QCOM).

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