In June, Microsoft announced that its Surface RT tablet would be discounted by more than 50 per cent for Australian education institutions.
That meant the entry-level 32GB model would be available for $219, while editions with the touch and type keyboard cover could be purchased for $279 and $319 respectively.
Industry pundits met the news with a mixed reaction, with some praising the move as a way of expanding the device’s market share, while others wondering if it had deeper ramifications about the popularity of the tablet.
According to market research by IDC, Surface RT, spanning both Microsoft and Asus devices, had a four per cent share in the OS market when it launched in Q4 last year, which shrunk to two per cent in Q1 this year.
In comparison, Apple was the Q1 leader at 57 per cent market share, while Android was in second with 35 per cent.
IDC Asia-Pacific associate market analyst, Suzanne Tai, admits that the research shows that the Windows RT OS has been registering a slow local uptake.
“The slow uptake is due to price point and the lack of apps as compared to its competitors and also, its inability to run legacy applications unlike Windows 8,” she said.
“Additionally, retailers placed more focus on the iOS and Android tablets, as there were more incentives given from Android vendors.”
However, IDC expects the Surface RT to see a small increase in market share for Q3 due to the education discount.
“As the Australian education sector is willing to invest in technology that can enhance the learning experience in the classroom, Microsoft is attempting to curb Apple’s dominance in the education sector using a pricing strategy,” Tai said.
Although the discount is limited to education customers, some retailers such as Harvey Norman have quietly dropped the price of the Surface RT by approximately $120 in the wake of the campaign announcement.
As for why Microsoft chose this point in the year to run the campaign, Tai suggests it is connected to the vendor’s financial year.
“Since it begins in July, Microsoft has a renewed budget and the bandwidth to run this promotion to attract large deals from the education sector,” she said.
More than just pricing
Despite the education discount, Gartner consumer technology and markets principal analyst, Shalini Verma, expects the road for Surface RT to remain rocky.
“When a company is playing catch up in a market, it really needs a solid product to secure pole position,” she said.
Apart from a “weak” marketing effort and few physical stores selling Surface RT, Verma said the core issue with Surface RT is the OS itself.
“Windows RT has too many limitations for work related use and it lacks the appeal of a thriving apps ecosystem,” she said.
Verma explains that the Surface RT is “caught between many worlds” and “suffers from a lack of clarity on its positioning,” adding that it falls short of being a PC or a tablet, as well as a productivity or entertainment device.
“It isn’t broad enough to be a generalist device and not deep enough to be a specialist device, and the pricing did not help either,” she said.
As for the education discount, Verma said targeting the tablet at the education industry is a wise move and it will aid in clearing inventory.
However, she does not expect the education discount to be enough to turn the device’s fortunes around.
Instead, Verma recommends that the vendor’s education channel partners should be roped in to push the device into the schools, colleges and universities.
“Retail channels will help to push the device to students only,” she said.
“To position the device for the education industry vertical, Microsoft needs relevant apps and tools for teaching, learning, collaborating, and not just a cheaper version of Microsoft Office.”
Verma adds that a lot more than pricing will be needed to gain traction in the education vertical in Australia, as is “fairly evolved” when it comes to technology usage.
“It’s one thing to say that the device is great for the education industry, but it’s quite another to actually demonstrate it through relevant apps to teachers and a closer tie in with academia’s existing online tools,” she said.
For those reasons, Gartner expects Windows 8 to have better prospects in the market than Windows RT, particularly when battery life and performance improves on Intel’s Atom Bay Trail chips.
Patrick Budmar covers consumer and enterprise technology breaking news for IDG Communications. Follow Patrick on Twitter at @patrick_budmar.