@AC
Couldn't agree more. Show me someone, anyone apart from anti-apple zealots who sees the Zune as groundbreaking or even anything beyond competent.
It's just not the platform to be the launchpad to take on iPhone OS 3 or Android.
I couldn't see this even 18 months back but MS appear to finished. Ah, you say dominance in OS and Office, but the shift to mobile computing, smart phones et al is slowly delivering a death of a thousand cuts. Add to that FOSS continuing to deliver into the infrastructure market, the Oracle/Sun link up and it's hard to see any turf where MS isn't seeing major challenges emerging. And unfortunately they seem to be unable to think outside the box.
The problem, it seems to me, is that Microsoft have confused market share with profitability. The XBox division is a case in point - it's easy to loss lead hardware to gain market share, but there needs to be a plan to generate the revenue to recover that. And in that respect (accounting trickery excepted) the XBox division doesn't make money. Sky (in the UK) did exactly the same thing, giving away expensive set top boxes, but on the basis of a really solid ongoing revenue model based around sports programming. Microsoft don't seem to have that.
The danger is that their phone, like the Zune, will be an also ran product that fails to make an early impact and they withers on the vine.
MS need to decide what their plan is - even given their size they can't compete across the piece. The question Steve Balmer needs to ask himself is "Where do you want to go today?" ;-)