An ARM-Based Microsoft Surface 3 Wouldn't Have Saved Windows RT

Fellow Fool Leo Sun recently published his views on what the recent announcement from Microsoft means for both Intel and ARM Holdings . I agree with Leo's view that Microsoft "made the right play" in adopting an Intel chip inside the Surface 3 that runs full Windows. The Surface 3, in my view, is simply a much better device now that it's a legitimate Windows PC.

Where I respectfully disagree with Leo is in this claim: "If Microsoft had kept ARM and RT on the Surface 3 and upgraded the device to Windows 10, other OEMs might have given ARM-based chips another chance."

A rose by any other name ...If Microsoft had released a Surface 3 based on a leading-edge ARM-based tablet chip -- say, an NVIDIA Tegra X1 or a Qualcomm Snapdragon 810 -- I don't think this would have improved the value proposition of the device relative to the prior-generation Surface 2.

Sure, it would have been a faster Windows RT tablet, but it would have to compete with a sea of full Windows tablets. One could conceivably argue that a high-end ARM chip like the Tegra X1 offers better performance than the Intel Atom x7 found inside the Surface 3, but the Atom x7 is relatively fast and -- by virtue of its x86 compatibility -- can run full Windows 8.1 and applications.

Why is this a big deal?Microsoft has traditionally marketed its Surface lineup of tablets -- both the "regular" and the "Pro" versions -- as devices that can serve the user well as both content consumption devices and productivity devices. In effect, they're a replacement for both a traditional non-Windows tablet (like Apple'siPad) and a consumer-grade laptop.

Without the ability to run full Windows, a Windows RT device fails spectacularly at serving as a laptop or PC replacement. Believe it or not, to replace a machine that runs full Windows and the large library of supported applications, the device should probably run all of those applications.

Back to the original claimLeo claims that if the Surface 3 had an ARM chip and ran Windows RT, other tablet vendors might have given Windows RT a chance. I disagree. Many of these companies already offer tablets or hybrids that run full Windows at very low prices, so it's not clear how those companies would benefit from offering fundamentally less functional devices.

If anything, when Microsoft was trying to sell the Windows RT-based Surface RT and Surface 2 devices, the OEMs seemed to actually have an advantage over Microsoft precisely because they were selling full Windows devices. That playing field is now leveled, and Microsoft is now in direct competition with the Windows tablet vendors.

Demand for an ARM-based Surface 3 would probably have been abysmalThe original Surface RT sold poorly at full price, and Microsoft needed to sell its initial Surface RT stock at steep discounts just to move the units, taking an inventory write-down in the process. I don't think the Surface 2 did much better

If Surface 2 demand was booming, Microsoft would have been all too eager to launch a successor, perhaps with an NVIDIA Tegra K1 or a Qualcomm Snapdragon 805, to capitalize on any demand for even better Windows RT devices.

At the end of the day, Windows RT was just a terrible idea on Microsoft's part, and whether Microsoft stuck to its guns or not on RT wouldn't have made a difference as to whether the other Windows-based tablet vendors used it. The OEMs had the foresight to realize early on that Windows RT was a dead end; I'm glad Microsoft finally made that realization, too.

Better late than never, right?

The article An ARM-Based Microsoft Surface 3 Wouldn't Have Saved Windows RT originally appeared on Fool.com.

Ashraf Eassa owns shares of Intel and Qualcomm. The Motley Fool recommends Apple, Intel, and Nvidia. The Motley Fool owns shares of Apple and Qualcomm. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.