Microsoft’s decision to create a Windows 8 version for use on ARM processors called Windows RT has become a bit of an enigma in the industry. Windows RT based tablets were launched with much fan fare yet sales of RT based devices has fallen way short of predictions.
In fact, Microsoft is selling their Surface RT to schools now for $100, something that suggests that the Windows Surface RT experiment is pretty much dead. Microsoft has its own self to blame for this. Their decision to include Office minus Outlook was a serious blow for these early models. While newly created Windows 8 apps worked on RT, the fact that it was not backward compatible with existing Windows Apps really added to its lack of allure for most customers
Also their TV ads didn’t help either. Instead of showing people the virtues of Surface they decided to show hip young people dancing and jiving holding RT Surface tablets, something that makes no sense to anyone who wanted to know what Surface really was and why they should even consider buying it. These ads were a waste of money and a big mistake in my book.
Our research suggests that Windows RT in 10-inch tablets and laptops probably will never take off. Mostly because of lack of backward compatibility with current Windows apps, which to a lot of people is still a big issue. While it is true that Windows 8 apps work on RT devices, the lack of Windows 8 apps, especially those long tail apps, will continue to hurt it in these types of models too.
However, there is one device, or area, where RT could be quite welcomed. One of the things you may have noticed is that 7” or 8” tablet prices have come down in price. Over the weekend I saw a 9” tablet for $99.00 at Fry’s. Sure it was a no-name brand but it had Android Ice Cream Sandwich on it and was more than serviceable as a basic tablet. What we are seeing is a race to the bottom with smaller screen tablets and it is becoming harder and harder for any tablet players to compete when prices get this low and they are all pretty much alike.
Gaming and Media
What is needed in the small tablet space is differentiation. Just using a mainstream processor will not cut it if the goal is to be heard above the crowd. It is true that being tied to a rich ecosystem like Amazon and Apple have for their smaller tablets helps them differentiate but for others, especially those betting on Windows 8 for tablets, they have no edge against this onslaught of race to the bottom low-end tablet space.
While CPUs in smaller tablets are important for delivering long battery life, the need for an upscale processor is somewhat minimal. However, one area of content that is important–even in small tablets–is games and video. For games, the GPU will become an important part of differentiating these smaller tablets. Especially since the use case for many of these smaller tablets will lean toward media and entertainment.
This is where RT could be on somewhat equal footing. In smaller tablets, backward compatibility with existing Windows apps is not important. Rather, it just needs to run Windows 8 apps and do them extremely well. But games and video built for Windows 8 could have an advantage when running an ARM processor like Nvidia’s Tegra or Qualcomm’s Snapdragon. Both processors which, for the time being, are likely to have a graphics advantage over their lower cost x86 counterparts. ((We can debate all we want the degree of which “good enough” experiences exist, but graphics is still an area where we will continue to observe clearly better visual experiences))
Nvidia has made the GPU a key part of their mobile processor known as Tegra and to date, Nvidia has had some pretty big wins in tablets because of the robustness of Tegra’s CPU and GPU. Qualcomm, with Adreno, and Intel as well, both realize that the GPU is becoming much more important in mobile and they too have been working hard on developing more powerful graphics processors for use with their mobile SoCs.
Most of Nvidia’s tablet wins have been for use with Android but vendors wanting to do Windows 8 ARM based tablets need to look closely at the role a GPU will have in driving greater differentiation with these smaller tablets. From our research we are finding that smaller tablets are mostly used for content consumption and games and not productivity. Making these smaller tablets exceed consumer’s expectations, especially with games, could allow Windows RT to be taken seriously. An SoC with an emphasis on graphics added to deliver a great gaming experience could help deliver on this use case. And if the graphics and media experience is objectively clear, consumers will pay a premium for this if the tablet is to be used for HD games and video. ((Obviously there are many variables to this, including rich applications and games being developed for Windows RT))
It will be important to watch what happens at Microsoft’s Build conf in SF next week and see how much emphasis they make on creating games for Windows 8. If this is a major part of their strategy, then RT based small notebooks and tablets could thrive in this space even if they are not a bargain based prices.