As Google is accelerating into the distance, that's kind of difficult. Google just entered a Microsoft market with the Google Phone. This technology is so good, I think it will blow away Windows CE.
How can microsoft VOIP compete with Skype also. Skype, a tiny company, with an infrastructure-less phone system. Go for skype, you don't need a guy running the system on your own box, and you don't need a box at all.
Much cheaper, and it's already so good.
I think Microsoft need to reinvent themselves, but aiming for me-too products is guaranteed to generate failure.
Their main product was exceptional at the time, because the only GUI around was tied to expensive hardware, and the office suite worked very well with the GUI.
Apart from some penetration into the server market, that's pretty much the story to date.
Personally I think it's time for Microsoft to make hardware and become excellent at it. Dell are stopping manufacturing, IBM doesn't anymore, pretty much everything else is offshore, so what's the problem?
They did a good job with the Xbox, Xbox360 was a disaster (hardware wise) but they can learn. A Microsoft laptop would be interesting... (and a desktop range, with a top of the range 8 core in the lineup).
Google will enter this space also at some time of course, so best to get established.
Imagine that Apple, Microsoft and Google hardware. It would be a battle and a half, and the customer would win win win.
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