<< BlvdKing: MS doesn't really give a jack whether or not windows is the #1 desktop OS.  >>
I disagree.  I think that MS beleives Windows must be preserved -almost- above all else, and that will bring about their demise,
Here's a quote from Neal Stephenson's In the Beginning Was the Command Line:
 
<< Why, then, do I say that Microsoft is not such a great operating systems company? Because the very nature of operating systems is such that it is senseless for them to be developed and owned by a specific company. It's a thankless job to begin with. Applications create possibilities for millions of credulous users, whereas OSes impose limitations on thousands of grumpy coders, and so OS-makers will forever be on the sh*t-list of anyone who counts for anything in the high-tech world. Applications get used by people whose big problem is understanding all of their features, whereas OSes get hacked by coders who are annoyed by their limitations. The OS business has been good to Microsoft only insofar as it has given them the money they needed to launch a really good applications software business and to hire a lot of smart researchers. Now it really ought to be jettisoned, like a spent booster stage from a rocket. The big question is whether Microsoft is capable of doing this. Or is it addicted to OS sales in the same way as Apple is to selling hardware?
Keep in mind that Apple's ability to monopolize its own hardware supply was once cited, by learned observers, as a great advantage over Microsoft. At the time, it seemed to place them in a much stronger position. In the end, it nearly killed them, and may kill them yet. The problem, for Apple, was that most of the world's computer users ended up owning cheaper hardware. But cheap hardware couldn't run MacOS, and so these people switched to Windows.
Replace "hardware" with "operating systems," and "Apple" with "Microsoft" and you can see the same thing about to happen all over again. Microsoft dominates the OS market, which makes them money and seems like a great idea for now. But cheaper and better OSes are available, and they are growingly popular in parts of the world that are not so saturated with computers as the US. Ten years from now, most of the world's computer users may end up owning these cheaper OSes. But these OSes do not, for the time being, run any Microsoft applications, and so these people will use something else.
To put it more directly: every time someone decides to use a non-Microsoft OS, Microsoft's OS division, obviously, loses a customer. But, as things stand now, Microsoft's applications division loses a customer too. This is not such a big deal as long as almost everyone uses Microsoft OSes. But as soon as Windows' market share begins to slip, the math starts to look pretty dismal for the people in Redmond.
This argument could be countered by saying that Microsoft could simply re-compile its applications to run under other OSes. But this strategy goes against most normal corporate instincts. Again the case of Apple is instructive. When things started to go south for Apple, they should have ported their OS to cheap PC hardware. But they didn't. Instead, they tried to make the most of their brilliant hardware, adding new features and expanding the product line. But this only had the effect of making their OS more dependent on these special hardware features, which made it worse for them in the end.
Likewise, when Microsoft's position in the OS world is threatened, their corporate instincts will tell them to pile more new features into their operating systems, and then re-jigger their software applications to exploit those special features. But this will only have the effect of making their applications dependent on an OS with declining market share, and make it worse for them in the end. >>