Market Dynamics: Windows RT

At the 2011 Consumer Electronics Show, Microsoft officially announced what would later become Windows RT. Two years later, CES 2013 came and went without a single Windows RT product announcement. Much to the chagrin of Microsoft, RT is still sputtering on the launchpad as ASUS formally announces its divorce from the platform. Today we'll look at why Nvidia and Redmond have doubled down on their investment.

Nvidia has made a name for itself in discrete computer graphics over the years, and has recently made inroads into the High Performance Computing market with its Titan cards. The winds of change are blowing though and like many of the entrenched PC players, Nvidia is tightening its belt as its traditional market slowly shrinks. Though their Tegra 3 chip featured prominently in the popular 2012 spin of ASUS/Google's Nexus 7, the green team was snubbed when ASUS decided to transition to Qualcomm for the 2013 edition. Unfortunately this has left Tegra 4 as a pretty good solution to no problem. This, no doubt, weighs as heavily on Jen Hsun's mind as it does his pocketbook. It's no wonder then, that Nvidia is shopping Tegra 4 around to anyone in earshot, including Steve Ballmer's crew. Tegra represents new growth and fresh markets for Nvidia, and it can't afford to let any opportunity slip through its fingers.

It's no secret that the market response to Windows Phone OS has been decidedly tepid. The frustrating part is that MS hasn't made any big blunders, in fact its been on point more often than it has missed the mark. Unfortunately, good enough execution isn't good enough when you're the third player to enter a market, especially one as sticky as smartphone OSes. Even Microsoft's old friend Intel left the sandbox long ago to play with it's new mobile friends at Google and Samsung (a story for another post). Win RT represents a second chance at the mobile market and an opportunity to fill the tablet-sized gap in Windows' lineup.

Unfortunately for Microsoft, where Windows Phone OS was mediocre, Windows RT was an unmitigated disaster. Between OEMs pulling out after Mirosoft's decision to release its own Surface tablets and the general lack of availability of "traditional" MS products on Win RT (Outlook anyone?), Microsoft just couldn't catch a break. The product has improved over it's 9 month lifetime, but first impressions are hard to overcome. Microsoft now finds itself in the fight of its life with two major products on which it has to iterate fast and hard. Microsoft has irons in the fire, but it has to show that it can put together a compelling platform that will take market share.

Now the true story of this partnership emerges; Nvidia and Microsoft are huddled in the same boat, though to neither party's great pleasure. Both companies have real opportunities to make something novel and the assets to bring to bear on the problem, it just hasn't come together yet. I think that's the most frustrating part about the state of this platform. I hope they pull it together and create something compelling. Either way, we'd better find out soon or the opportunity will be gone.