Microsoft might abandon Win. RT; Nomura warns of Xbox losses

|About: Microsoft Corporation (MSFT)|By:, SA News Editor

Microsoft (MSFT) Devices & Studios product chief Julie Larson-Green during a recent UBS conference talk: "We have the Windows Phone OS. We have Windows RT and we have full Windows. We're not going to have three."

Though not overtly stating it, Larson-Green hints Windows RT, which has been virtually abandoned by OEM partners, will get the hook. She admits RT lacks the flexibility of traditional Windows (albeit while suggesting it's more mobile-optimized), and that Microsoft didn't do a sufficient job of differentiating its Surface RT and Surface Pro tablets.

Mary-Jo Foley previously reported Microsoft is thinking of merging Windows Phone and RT. She now says (citing a source) "it's more likely that the Windows Phone OS core is what Microsoft will use as the starting point" for its merged OS, rather than RT.

Meanwhile, Nomura's Rick Sherlund is making a fresh case for unloading the Xbox unit (previous): He thinks the business will likely lose over $1B this year, and simply isn't enough to "cement Microsoft’s position in the consumer market," given the popularity of mobile media consumption.

A big issue: Mobile's volumes have come to dwarf the console market's. While Sherlund thinks Microsoft might sell 3M-4M Xbox One units in 2013, and Sony is aiming for 5M PS4 sales by the end of March, IDC thinks Q3 smartphone and tablet shipments respectively totaled 261.1M and 47.6M.