Does Nokia have a Windows RT tablet in the pipeline?

Does Nokia have a Windows RT tablet in the pipeline?

Summary: Rumors suggest the phone maker does have a Windows RT tablet in the pipeline. Is this a desperate grab by Nokia for a market that it hopes might offer salvation, or is there a plan to make this work?

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Rumors are circulating that Nokia is working with Microsoft, Qualcomm, and Compal Electronics to resume development of a 10-inch Windows RT tablet to market, and that hardware could be unveiled the 2013 Mobile World Congress in February 2013.

The rumor has been sparked to life again by a report over on Chinese tech site DigiTimes. On its own, this might not mean anything (DigiTimes has a patchy track record when it comes to reliability) but the information fits in with chatter I'm hearing from supply chain sources.

Sources also claim that development was halted after Microsoft announced the Surface tablets in order to see if there was a demand for these tablets. If this rumor is true, it seems that the demand question has been answered to Nokia's satisfaction.

It's been hard to bet a bead on Surface sales. Microsoft remains tight-lipped on sales figures -- itself, this is not uncommon, but analysts believe demand has been weak. Web metric data seems to suggest that adoption has been slow, but not as slow as other figures might suggest.

On the plus side, a report suggests that the Surface tablet is the single most popular Windows 8 and RT device in circulation, and that Microsoft is pulling in the same level of license fees from the tablet as it would a PC running Windows and Office.

The real question here is whether Nokia can make a Windows tablet that people want. The company has been financially floundering for some time now, and since (essentially) transforming the company into a Windows Phone maker, things haven't really improved.

While Nokia is renowned for making top quality hardware, it's hard to see what the company can bring to the table that Microsoft, or any of its hardware partners, can't. With the Surface, Microsoft can turn a profit from the hardware by cutting out the middleman -- in this case the OEMs and ODMs -- out of the equation. Other OEMs will have to pay Microsoft a licensing fee for the platform, and this will eat into the margins.

Unless, that is, Microsoft has plans to give Nokia some sort of special status as it did with Windows Phone, and cut a deal. But if that was the case, why didn't Microsoft get Nokia to build Surface?

Is this a desperate grab by Nokia for a market that it hopes might offer salvation, or is there a plan to make this work?

Time will tell.

Topics: Nokia, Microsoft, Tablets, Microsoft Surface

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30 comments
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  • If Nokia is doing this, I would have gone with a 7" tablet

    I think a good portion of the 10" tablet market is already saturated for the moment. I'm wondering if they should have gone with a 7" first, then a 10".

    But I'm not in the industry, so really can't say. Apple's been very tight lipped on their iPad mini sales, uncharacteristically silent on it's sales figures, so it could be 7" tablets still aren't near as popular as 10".
    William Farrel
    • Exactly

      Exactly what I was thinking. Nokia cannot compete against ASUS, ACER, Samsung, Microsoft and all the other players who've already got a 10" device out in the wild. Rather than try to carve out a slice of a crowded market, much better to release a product that has no competitors and grab the whole market for yourself.
      dsf3g
      • Problem is with Windows 8

        It is not built for 7 inch tablets (sadly - 10 inch tablets are too big IMO, 7 inches is right). Hopefully Blue should fix this.
        pratnala
        • How is the Modern UI not suited to 7" tablets?

          The only part I could see that wouldn't work well is snapping applications since there is much less screen real estate on a 7" tablet but other than that 1 feature (which is optional anyway) the entire Modern UI is perfectly well suited for a 7" tablet.
          toddbottom3
          • Dont take my word on it

            But I could swear I read an article saying W8 wasn't optimized for 7in tabs or they were working on it. Arrgh can't remember, but I would I would think that sense desktop mode isn't really touch friendly and 7 inch is smaller making those already hard to touch desktop targets even smaller and harder to touch.
            slimjim1989
          • Would be good to read that

            If the complaint is desktop mode then I will happily present my experience with the Surface RT. I never go into desktop mode unless I'm using Office. I can't imagine too many people wanting to use any office suite on any 7" tablet though so suggesting that Windows 8 isn't good for 7" tablets because of desktop mode is like saying OS X isn't a good GUI because it supports the command line.

            But if you can find that article, I'd be very interested in reading it. The only thing I'm aware of that might hurt 7" tablets is the resolution requirements of the snap feature although I would think the lack of screen real estate would be the bigger snap issue.
            toddbottom3
          • Desktop is a PITA for 7 inchers

            Windows RT needs to get rid if the desktop. IMO desktop is the reason for no 7 inch Windows tablets. Not Metro/Modern/Windows UI (heck, what should I call it?)

            Even I'm waiting for a 7 inch windows tablet. Price it at $179 and get rid of the desktop and you have got a winner
            pratnala
          • As I wrote above, desktop is a red herring

            I only ever go into desktop mode on my Surface RT for Office. All my email, surfing, video watching, gaming, task management, contact management, social networking, news reading, stock watching, online shopping, and even note taking (there is a Modern UI version of OneNote) is done without ever once launching the desktop.

            "Windows RT needs to get rid if the desktop."

            Sure, I hope that is where MS is headed. However, to suggest that Windows RT doesn't work as a touch OS because a desktop exists is like saying OS X doesn't work as a GUI OS because the command line exists. The solution is simple: don't use desktop mode if you don't have a mouse / trackpad. The Modern UI is good for 100% of every content consumption use case which is 99.9% of what people use 7" tablets for.
            toddbottom3
          • Dreamland

            179$ but id bite if it ever came true.
            slimjim1989
    • Good post

      "I'm wondering if they should have gone with a 7" first, then a 10"."

      I agree with you.

      However, I would question the benefits of Nokia getting into the tablet market at all. I have a Nokia Lumia 920 and a Surface RT and there really is very little integration between the 2. Apple and Google have basically taken 1 OS (and I'm including APIs and UIs when I say OS) and have put that 1 OS onto phones and tablets. However, their phone / tablet OS doesn't share APIs or UIs with their desktop offerings. MS has split their product line differently with phones having their own OS / UI / API and tablets / desktops sharing an OS / UI / API. There is great synergy for a company to release tablet / hybrid / laptop products based on Microsoft technology but not so much synergy for a company to release phone / tablet produts based on MS technology. Those 2 platforms don't actually share a whole lot other than the low level OS.

      Much of the time and money that Nokia has put into developing Windows Phone products will NOT translate well into producing a Windows RT tablet.

      IMO
      toddbottom3
      • Agreed

        but isnt the next few years of Microsoft development about product integration and creating an ecosystem vastly superior to the like of android and iOS. I mean they aren't even close but that what i have been getting out their recent products.
        slimjim1989
    • Re: If Nokia is doing this, I would have gone with a 7" tablet

      Windows doesn't support 7" tablets.
      ldo17
  • First person in line

    I'd buy this. I love the Surface, and more notably, my non-techie wife likes it more than her IPad.

    It would be nice to see Nokia's take on a tablet.
    Tojuro
  • Hmmm!

    I just disconnected (about 6 months ago) a Nokia digital TV receiver after about 8 or 9 years of stirling service (all the tv's now have them integrated). The hardware was bullet proof - but I think that Nokia - as much as I love them - will really struggle to produce a genuine Nokia tablet at a competitive price point. I'd be more than happy to be proved wrong on this though ...
    dc13
  • come on

    if they can't get any success in phones, forget 10" tablets. Its just a desparate action at this point.
    drwong
  • Please stop with this ridiculous notion

    "Other OEMs will have to pay Microsoft a licensing fee for the platform, and this will eat into the margins."

    Windows is not free to Microsoft. Real people are paid real money from real Microsoft bank accounts to write and maintain Windows. That real money eats into margins for MS hardware too.

    While it is difficult to say for sure how much Windows RT cost specifically, and what percentage of Windows 8 and VS.NET development has to be earmarked to RT, with sales that measure at BEST in the low millions, it is quite likely that MS has spent more on developing Windows RT than they've made back in Windows RT specific revenues so far. MS is taking 100% of the risk for software costs. They have to pay salaries BEFORE they make a single cent on sales.

    Put it this way, if OS development were actually free, each OEM would have their own OS. That they don't proves that developing your own OS (or even customizing Linux for your hardware) is NOT free.

    So AKH, you've been called out on this before. Stop trying to pretend that MS gets Windows for free. It isn't free. MS pays huge overheads before the first bit is shipped to a customer. These overheads "eat into the margins". Pretending otherwise is ludicrous.
    toddbottom3
    • Poor understanding as usual

      Look up sunk vs recurring costs.

      Assuming MS and other Surface RT producers have the exact same HW cost structure, MS could sell the devices for HW cost plus a small amount, say $10, and still be better off than not selling any, in other words make a few $$ on each sale, or if you prefer, recover a small part of the RT development costs.

      Other HW RT producers could not do the same, as the $10 would not cover the MS license fee. The producers would therefore lose money on each unit and would be better off NOT making any devices.

      Hence MS has a cost advantage and can also afford to write off or finance from other sources, the RT development cost.

      If you want to shill better, you need a better understanding of MS's business. Like I have said before, MS would be better off with someone else shilling for them.
      D.T.Long
      • What?!?!

        Why would Microsoft spend all that money just to make less on selling licenses?

        Do you think the windows division wants to see its revenues go from $40 (whatever the real number is) a license to $0? Especially after all the anti-trust problems the world loves to put on Microsoft.

        Just because something can be done in theory, doesn't mean it makes practical sense.


        Sure Microsoft could sell the Windows license to itself at a loss, but the hardware side would have to make enough profit to cover that loss, cover the new overhead of manufacturing and selling hardware and then some more on revenue on top of all that just to make it worthwhile.


        Otherwise you have Microsoft working harder to make less money and put their partners out of business, for no real benefit.
        Emacho
      • You assume MS will sell hundreds of millions Windows RT licenses / devices

        You didn't actually dispute anything I wrote. Yes, those are sunk costs. The key word being COST. If there is a cost, it means it wasn't free. AKH is making it sound like Windows RT is free to MS. It isn't. You can quibble about whether the cost was a recurring cost or a sunk cost (and I never suggested it was anything other than a sunk cost) but as usual, you missed the point. Windows isn't free to MS. There IS a cost associated to creating it. That cost needs to be spread out over every unit sold. MS hopes they will sell enough so that the sunk cost per unit is lower than the profit per unit. That will happen if they sell millions upon millions of these things. It won't happen if they only sell 500,000 - 600,000 of them. ALL the risk belongs to MS.

        "MS has a cost advantage"

        No, MS has a different cost profile. MS has to pay hundreds of millions of dollars before a single unit is sold, without knowing that they will sell hundreds of millions units to recover their sunk costs. MS has a HUGE cost disadvantage at the beginning. OEMs have a HUGE cost advantage at the beginning. The software powering an OEM's first unit costs them $80. The software powering MS's first unit cost millions of dollars. In what world is $80 bigger than millions of dollars?

        In the long term, IF Windows RT devices do well, yes, MS will have the cost advantage. That's the reward they get for risking it all at the beginning. Do you not think that companies should benefit if the risks they take end up working out?

        "The producers would therefore lose money on each unit and would be better off NOT making any devices"

        They could always make an Android tablet. After all, I hear Android is free. If they choose to make a Windows RT tablet, it is because they expect that the $80 they'll spend on the license will give them their $80 back PLUS more profit than the "free" Android. The great news is that thanks to MS taking all the risk, the OEM has every single advantage in the world. They can price out how much they will profit from the hardware. If that is more than $80, they buy the license. If it is going to be less than $80, they don't, and they haven't lost a single penny. MS's sunk costs are paid whether or not they ever get it back. MS lost millions of dollars on Windows RT right up until October 26. OEMs lost nothing. OEMs have the cost advantage.
        toddbottom3
  • The photoshopped image for the lead on this article is telling...

    Someone in ZD's art department took a photo of someone holding an iPad and 'shopped in "Nokia" over the Apple logo.

    Wouldn't a photo of someone holding a Surface RT slate with Nokia stamped on the back been more appropriate?
    TheWerewolf