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Nokia Rumored to Shelve Plans For Windows RT

Stocks in this article: MSFT NOK INTC ARMH HPQ AAPL

NEW YORK ( TheStreet) - Nokia (NOK) is reportedly dropping plans to market a tablet running the "lighter" version of Microsoft's (MSFT) Windows, Windows RT.

Earlier this year there were reports that Nokia had been working on two new tablet designs - one running the full Windows 8 for Intel (INTC) processors and the other with Windows RT running on ARM (ARMH)-based chips. The Windows 8 project is supposedly still underway.

The issue with Windows RT is that it can only run applications made for Windows RT. Hence, none of the popular programs for Windows XP, Vista Windows 7 and 8 can be used. A version of Microsoft's Office suite is included on RT devices as standard equipment.

To date, Windows RT has not been embraced by the computer-buying public - or many other manufacturers. Hewlett Packard (HPQ) rejected the idea of producing products using this operating system from the very beginning. Other manufacturers, including Microsoft, have experienced lagging sales of current Windows RT designs. Nokia's reluctance is therefore understandable.

I've been testing a preview of the upcoming Windows RT 8.1 operating system, and have found at least one major flaw remains. It seems Microsoft didn't spend much time or effort improving Windows 8/RT audio from previous versions. Apple's (AAPL) OS X and iOS are both miles ahead when it comes to how its devices handle digital music files.

I've found that Windows RT 8.1 running on an Asus VivoTab RT somehow adds random, loud noises to digital music files during playback. Microsoft engineers say they've been able to recreate the problem in their lab and are now working on it. If the problem is RT hardware - and not software based - a quick fix might be very difficult.

If today's rumors are true, rejecting Windows RT probably won't change Nokia's overall relationship with Microsoft. Nokia is still one of the biggest proponent of the Windows Phone operating system for smartphones. Nokia is reportedly planning a big event in New York City to announce a new flagship Windows phone with a monster, 41-megapixel camera.

Nokia shares were advancing 2.81% to $4.25, while Microsoft shares slipped 0.36% to $34.20 in New York trading.

--Written by Gary Krakow in New York.

>To submit a news tip, send an email to: tips@thestreet.com.

Gary Krakow is TheStreet's senior technology correspondent.

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