Prices of Windows RT tablets drop, point to failure of OS

Prices have dropped for Dell's XPS 10, Asus' VivoTab RT and Lenovo's IdeaPad Yoga 11

Prices of Windows RT devices have started falling, signaling an attempt by PC makers to quickly clear out stock after poor adoption of tablets and convertibles with the operating system.

Microsoft released Windows RT for ARM-based devices and Windows 8 for Intel-based devices in October last year. The price drop is an acknowledgement that Windows RT has failed, analysts said.

Prices of popular products usually don't fall, but Windows RT devices were not in demand, and prices fell, analysts said.

The starting price for Dell's XPS 10 is now US$449 for a 32GB model, scalping $50 off the original launch price. The 64GB model is $499, which is a drop from the original $599 price. By comparison, the price of the Latitude 10 tablet with Intel processors and Microsoft's Windows 8 OS remained stable at $499.

Asus' VivoTab RT, which is largely sold through retailers, is being offered by Amazon.com for $382 with 32GB of storage, which is a heavy discount from the $599 launch price. Retailers like Best Buy, Staples and Office Depot have also dropped the price of the tablet by $50, now selling it for $549.

Newegg is listing VivoTab RT as having been discontinued. Asus did not respond to a request to comment on whether the company was still offering the tablet.

Lenovo is offering the IdeaPad Yoga 11 for $599 as part of a seven-day deal, which is a drop from the original $799 price. However, TigerDirect is offering an IdeaPad Yoga 11 model for $599 on its website, while Amazon is selling a model for $499.99.

Samsung did not ship its Windows RT tablet, Ativ Tab, to the U.S. market.

However, the starting price of Microsoft's Surface RT remained consistent at $499 on its online store. Microsoft also offers Lenovo's IdeaPad Yoga 11 through its store, but has stopped offering tablets like the VivoTab RT on its website. The company last month said it stocks its store with RT devices based on availability and demand.

Though Microsoft has not publicly acknowledged the failure of Windows RT, there is already growing concern about the fate of the OS. IDC earlier this month said that Windows RT tablet shipments have been poor, and that consumers have not bought into "Windows RT's value proposition."

PC and chip makers have acknowledged poor adoption of the operating system. Nvidia's CEO, Jen-Hsun Huang, last month said he was disappointed with the poor response to Windows RT, and Acer executives have said that Microsoft needs to improve the usability of RT.

Prices usually drop if products are made in volume, or if there is poor demand, said Jack Gold, principal analyst at J. Gold Associates.

"I think you're seeing discounting based on user demand. I never thought RT was going to be that successful," Gold said.

Windows RT was doomed right from the start, and devices with the OS had no chance to compete with the more established Apple iPad and Android tablets, Gold said.

A price drop may be an attempt to stimulate demand, said David Daoud, research director at IDC.

"A lot of it is pre-positioning for the summer season," Daoud said. "Do price reductions stimulate demand? Sure they, do, in the right time."

A price drop could help clear out inventory ahead of the back-to-school season, when new devices typically ship, Daoud said. Companies also want to get rid of excess inventory as it can be costly to hold products for long.

The analysts acknowledged that Microsoft did little to spread awareness about Windows RT. People could not understand the purpose of the OS as it was incompatible with existing Windows applications, and it wasn't a complete operating system like Windows 8.

"RT will fade away over time," Gold said. "It's not a full Windows 8 experience. That said, why wouldn't I spend more and get a full Pro version of the device?"

Agam Shah covers PCs, tablets, servers, chips and semiconductors for IDG News Service. Follow Agam on Twitter at @agamsh. Agam's e-mail address is agam_shah@idg.com

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Agam Shah

IDG News Service
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