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Toshiba Scraps Plans for Windows RT Devices

Toshiba Corp. (TOSYY, 6502.TO) scrapped its immediate plans to release devices based on a new version of Microsoft Corp.'s (MSFT) Windows operating system, becoming the latest computer maker to show some hesitation toward the technology. The Japanese electronics maker said in a statement that it's not introducing tablets based on Windows RT due to delayed components "that would make a timely launch impossible." Instead, Toshiba will focus on bringing Windows 8 devices, which run on chips from Intel Corp. (INTC) and Advanced Micro Devices Inc. (AMD), to market. "We will continue to look into the possibility of Windows RT products in the future while monitoring market conditions," Toshiba spokesman Eric Paulsen said. The company had been working with chip maker Texas Instruments Inc. (TXN) on such devices. TI wasn't immediately available to comment. The move follows similar steps by Hewlett-Packard Co. (HPQ) in June and deals another blow to development of the new Windows RT operating system that runs on chips based on ARM Holdings PLC technology (ARMH, ARM.LN) technology. It also leaves partner TI in a difficult position and raises some questions about TI's foothold in the mobile chip market. Windows RT, to be released in October, is the first version of Windows that will work with ARM-based chips, not just those from traditional partners Intel and AMD. The version of the operating system that works with chips from Intel and AMD is called Windows 8. To create a similar experience across its Windows RT devices, Microsoft has played a bigger role than normal in the device development process. Some PC makers have privately complained about the lack of software and other aspects of adopting Windows RT, including the question of consumer demand for the product. Adding to the challenges for companies considering Windows RT, Microsoft in June unveiled its own branded tablet, dubbed Surface, based on the operating system. The move is believed to have surprised and angered computer makers, which now face the prospect of competing with their software partner. A couple months before Toshiba's announcement, PC giant H-P said it had shelved its plans for a Windows RT device. The company said it instead was initially focusing on Intel-powered tablets for business users. As part of its new Windows strategy, Microsoft has limited the number of companies who could work with chip makers for an initial release of Windows RT tablets. Nvidia Corp. (NVDA) has been working with Asustek Computer Inc. (ASUUY, 2357.TW) and Lenovo Group Ltd. (LNVGY, 0992.HK), according to people familiar with the matter, while Qualcomm Inc. (QCOM) is paired with Dell Inc. (DELL) and Samsung Electronics Co. (SSNHY, 005930.SE), people familiar with the matter say. TI's only initial partner was Toshiba, which earlier this year unveiled its plans for a tablet using TI chips. Questions about the device emerged Monday after Microsoft published a blog post about Windows RT development that left Toshiba off the list of tablet partners. "All of these Windows RT PCs will have consistent fast and fluid touch interactions, long battery life, connected standby and are beautiful, thin, and light designs," Mike Anguilo, vice president of Microsoft's ecosystem and planning team, said in the blog post. "All of these are designed to make the most of the capabilities of Windows RT." TI said as recently as two weeks ago that development with Toshiba was going well. Kathy Brown, the TI general manager overseeing Windows development, said in an interview with Dow Jones at the beginning of August that TI was "making great progress" with Windows and was "very excited with what Toshiba is bringing to market." However, she did caution that development for Windows RT hasn't been simple. "No one is having an easy time with this," Ms. Brown said in the interview. "Microsoft said the same thing with its own progress. I would not say it's hard, but it's difficult to put Windows on system-on-a-chip. I knew it would be difficult, and it has been." The semiconductor industry has been shifting away from separate chips and toward multifunction products that the industry calls system on a chip, or SoCs. Such products save space and power in mobile devices and other hardware. Ms. Brown said SoCs present some engineering challenges as they require all parts of the operating system to seamlessly work together in one chip. TI processors power some high-profile devices on the market--including the Amazon.com Inc. (AMZN) Kindle Fire--but rivals such as Nvidia have shown more traction in tablets of late. Nvidia's processors are used in both Microsoft and Google Inc.'s (GOOG) self-branded tablets. Qualcomm, meanwhile, dominates the smartphone market but has had some setbacks with Windows RT. H-P was working with Qualcomm on its Windows RT device before ultimately setting aside its immediate plans for the new technology. As for TI, it has been lessening its exposure to the mobile business, though the company has repeatedly reiterated its commitment to the market. It is in the process of exiting its wireless chip business, but it also has been pushing the "Internet of Things" for its operations that provide chips that act as the brains of electronics. Write to Shara Tibken at shara.tibken@dowjones.com Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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