Summary: SJVN calls it "the fall of Microsoft" and attributes much of it to GNU/Linux (mostly on sub-notebooks)

BURIED in the news was this interesting nugget of information which suggests that Microsoft's UMPC partner could be in its deathbed. The emergence of low-cost sub-notebooks which run GNU/Linux could not have done OQO any good.

Atom UMPC first casualty of OQO money woes?

UMPC maker OQO has canned its latest model, if rumours fed by Twitter tweets are to be believed. It has also been claimed that pre-orders have been cancelled.

Who would pay for a high-end UMPC when far cheaper options exist? And actually, Microsoft suffers from this too. Its net earnings dived 32% and Microsoft will surely blame "netbooks" (it won't use the "L" word because that would give it publicity), but it's clearly to do with GNU/Linux, which is killing Microsoft in sub-notebooks (financially). SJVN has just published "The fall of Microsoft," in which he explains why this is indeed the big fall.

For the stockholders among you that means Microsoft's diluted earnings per share were down 30% over last year and well below what the 39 the analysts were expecting...

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It's more than [the economy] For starters, I blame Microsoft's management. They've been sloppy and lazy for years now.

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...instead of focusing on what Microsoft does well -- strong-arming hardware vendors into installing Windows software -- he's been distracted by picking dumb legal fights with open source and buying Yahoo.

Or, considering my low opinion of Microsoft, I guess I should be saying, "Please, please keep Ballmer in charge. He's the man!"

Another major reason is that Microsoft may own the lion's share of the netbook market now but it did so by cutting its profits to the bone and beyond. Worse still, if you like Microsoft, this new talk of Windows 7 Starter Edition, which is junkware by any standard, being the Windows for netbooks will alienate customers. Microsoft will have a fit trying to hold onto its current netbooks predominance at changes ripple through this market in the rest of 2009.

According to one person, the "Windows division" brought $2.5bn in profit (out of $2.98bn in total profit). That is 84% of the total profits. € So it's true that almost all the valuable income still comes from very few products. We already knew this. Judging by the looks of Vista 7, Microsoft's biggest troubles are still ahead. ⬆

"LH [Longhorn] is a pig and I don't see any solution to this problem. If we are to rise to the challenge of Linux..."

--Jim Allchin, Microsoft