Say good-bye to Windows RT. The introduction of the Surface Pro 3 just killed it, if not sooner, then later. Here's why the operating system has not future.
With the Surface Pro 3, Microsoft has finally clarified its tablet strategy: Build productivity tablets that do double-duty as ultrabooks, and charge a premium for them. Aim them at the enterprise market, where Microsoft still has a stranglehold. Microsoft will be happy to pick up whatever mass-market consumers it can, but with the Surface Pro 3, that's no longer its primary market.
There's plenty of evidence for this. First is that Microsoft introduced a full-sized, powerful, expensive tablet/ultrabook combo rather than a low-priced Surface Mini as had been expected. In the mass market, smaller, less-expensive tablets are driving growth, not full-sized tablets. A most Gartner report on tablet sales for 2013 report concluded:
"The tablet growth in 2013 was fueled by the low-end smaller screen tablet market, and first time buyers."
The Surface Pro 3 is anything but a low-end device, with a starting price of $799. Add a Surface Pro Type Cover and that cost goes up to $929. That's not going to attract bargain hunters or first-time buyers. However, it won't scare away enterprises who run their businesses on Microsoft software, including many legacy systems. It's a reasonable price for an ultrabook that does double-duty as a tablet, particularly because it includes a very useful stylus.
Carolina Milanesi, chief of research at Kantar WorldPanel Comtech, told Computerworld that the Surface Pro 3 is clearly aimed at the corporate market, as a replacement for aging PCs:
"The enterprise is where they fit. And maybe it's best to think about [the Surface Pro 3] as where the next replacement cycle for PCs will go, and how something like it gives companies an upgrade path for their [current] laptops and PCs."
Even before the Surface Pro 3 introduction, some businesses were doing that with earlier Surface Pros, which are more expensive and have much smaller screens than the Surface Pro 3. In an email to Gregg Keizer of Computerworld, Fidel Deforte, the infrastructure and communications technology manager for the city of Cape Coral, said that he had started replacing some senior managers' hardware with Surface Pros. Those managers had been typically using both a Windows notebook and an iPad. He wrote:
"I replaced [a manager's] HP laptop and iPad (total value $2,600) with the Surface Pro 2 ($1,300) and she not only loves this, but sees that it is more flexible and efficient."
With a 12-inch screen and a much-improved keyboard, The Surface Pro 3 is even more of a replacement for traditional computers, and should sell even better.
So where does that leave the Windows RT-based Surface line? Nowhere. By not releasing a Windows RT-based Surface 3, Microsoft made it plain where its future is in tablets -- with businesses, not the mass market. Corporations won't buy RT-based tablets because they can't run desktop-based legacy apps. Consumers haven't bought them because they simply don't like them.
So whether it's now or later, Microsoft will kill Windows RT. It simply doesn't fit into the company's new tablet strategy.