MS tried to come up with the OS you are describing, with Vista. They had to gut the best parts and limit it to some GUI and security enhancements in order to have a hope of shipping it in the first decade the new century. There is the issue of compatibility with existing applications and the dominant share of the market that makes it impossible for them to do this. A new file system, for example, would impact their entire desktop and server platform. It might be relatively easy for the typical consumer to switch, but incredibly difficut and expensive for a larger corporation.
The second issue of a $500 (at today’s prices) computer that can compete with Apple’s offerings is not a major worry either. The manufacturer of such a machine would have to surrender a large percentage of the sale – and this is retail, mind you – to Microsoft for the OS and spend half as much extra on Office. Apple can throw in the OS and extra applications and charge only $70 for it’s “office” software. So, companies like Dell and HP would have to sell 10 times the units Apple says and still not match Apple’s profits. Believe me, no PC maker likes to sell $500 computers. There is just no profit in it.
However, Dan’s point about including the iPhone in the Mac OSX platform illustrates that Apple has found a way to sell $500 (or $400, in this case) units for a good profit. It may be possible for Linux based devices to compete in this segment, but definately not possible for Vista based devices for at least 3 more years when computing power at such scale is fast enought to accomodate Vista. By that time Apple will have 50 million devices in the market, and offer better speed and functionality for less than any Vista-based device could hope to offer. I think the age of vaporware is gone. Bill Gates’ last keynote at CES is an evidence of this. The number of consumers switching to Macs is another.
I would turn your concern on it’s head and ask, what do you suppose Apple plans to do with its $18.5 billion on cash? Will it buy Adobe and kill off it’s Windows products? Will it buy Sun and get an instant foothold into corporations to which it can then sell desktop units in mass? I think Ballmer and Microsoft investors have a great deal more to worry about Apple’s strategies than we do about the surface or the little box with a wire attached to it, that I can point to a building and find out the last time I was there.

My worry however, is not that Microsoft will ever compete with Apple in the consumer electronics arena. My worry is that Microsoft will actually get its s**t together for Windows 7.

What if Microsoft actually took the time to make an OS that could compare to OSX? The first Mac I ever owned was a G4 cube with OS9 which was the biggest disappointment. OS9 crashed as much as Windows at the time and froze even more.

My point is that you are writing off Microsoft in the same way that Michael Dell and company wrote off Apple. Again, I don’t know what they will or won’t do but I think it would be extremely foolish to write off Microsoft engineers as less brilliant than Apple engineers.

Truthfully, I am concerned that Microsoft has the ability to deliver an operating system that people might be happy with some day. If they do deliver a revamped version of Windows with new workings under the hood that can utilize resources even nearly as efficiently as OSX and be stable, Macs MIGHT have a problem. (Don’t get me wrong, I am writing this from Blackbook, and I have an iMac Alumnium and a Mac Mini) For if someone can get a $499 piece of ewaste with an LCD and a version of Windows that actually works well, people should be a little concerned about Apple’s computer business.

Again, these are just my thoughts and I find it hard to believe that a company with the business sense of Microsoft won’t realize the perfect storm about to sink its ship. Maybe their business sense hasn’t been the best in the past, but there’s no more excuses for them going forward in light of more recent developments in the economy, the industry, and consumer taste; and they know it.

For the record, I do own one Windows PC which I built in the Pentium 4 era, and since then I have been using Macs exclusively.

Which leads me to…

I wonder how Microsoft & Nokia are getting on trying to ‘bolt’ transparency effects, fluid animated screen transitions and true multi-tasking into their ‘pocket sized’ devices.
Vista can hardly run on a 2.0ghz Core Duo with 2gig ram let alone a sub 600mhz ARM processor.
It’s laughable – and yet the ‘cheesy eye-candy’ skin they drop onto a slightly modified Windows 6 Mobile codebase will easily convince another wave of ‘payroll journalists’ that Microsoft have truly delivered ‘the iPhone killer’.
Hopefully by then Gen 2 iPhone will be out and once again they’ll look like the yesterdays men they really are.

I am pretty tech-savvy, but I have no expertise in operating systems. I’d be interested in the details of why, despite the fact that the various Apple devices are not running exactly the same OS, they can be said to all be running OS X, while at the same time the different versions of Windows should be considered to be different OSs. Isn’t this pretty much a judgement call?

If not, what is really shared between the Apple OSs vs. the Microsoft OSs? How much of the code is actually shared (common code), vs. shared and then customized? What specific components or functions are therefore the same, or very similar?

[There is little similarity between WinCE and the WinNT kernel used in Windows NT/2000/XP/Vista. WinCE largely obsolete and even Microsoft is promoting using its desktop OS for use in embedded and handheld PCs, the very target WinCE hoped to hit. Microsoft is still stuck selling WinCE based Windows Mobile phones and media players. It has none of the functional overlap that Apple has in the new Touch/iPhone, desktop Mac OS X, and Apple TV.

The Touch/iPhone use a ported kernel and share much of the same software, including the same WebKit rendering engine. Microsoft has different, very large groups working on every product in far more isolation. That's part of the company's problem. - Dan]

Microsoft Office and Windows are still pretty much a monopoly in those environments, with a stronger than consumer land presence in browsers. Sharepoint, Exchange, Windows server all seem to be growing inside big corporations. I think this trend will only increase as Microsoft releases enterprise class versions of things like ERP and CRM products. (Not sure how IIS or .NET or SQL Server are doing inside enterprises).

Since Apple doesn’t play in this space, and there is more inertia there I doubt we will ever see MS go away in big companies – and thats a lot of money going their way.

[Apple certainly isn't competing in the Enterprise, but Microsoft isn't doing so well as you describe. Pundits like to talk a lot about Exchange, and Microsoft has successfully sewn up a lot of businesses with all-MS solutions, but Sharepoint has been a poorly rolled out failure, nobody takes IIS seriously outside of shops that have sold their soul to Redmond, and Microsoft is pitted against the encroachment of Linux, which while nothing special in the desktop area is a huge force in servers.

Apple is sticking to its strongholds in education and media/publishing/broadcasting, and growing products that will have potential to move into corporate circles in the future. If you look at what CNET/IDG wags are complaining about, you can easily pick out the most significant threats to Microsoft in business: Linux, the iPhone, Google.

If you look at Microsoft's revenues and profits, it makes a lot of money from Windows, Office and Servers, but its profits come mainly from Office and Windows. Servers are a struggle, because the company actually has competition. There's little room for Microsoft to grow dramatically anywhere, and it already charges sky high software licensing fees from its Enterprise users. It looks a lot like the old IBM (which incidentally is now pushing Linux). - Dan]