Summary: Microsoft has no immediate response to sharply-declining margins, so it hastily points to products that do not exist yet

THE TRUE impact of GNU/Linux [1, 2] on Microsoft's poor results (and subsequent sharp fall, which was expected [1, 2]) is one that even Mac sites have taken note of. From Roughly Drafted:

The Vista Myth: Why Windows 7 Won’t Turn Microsoft Around

After posting a spectacular 17% revenue drop, the company’s first ever year over year decline, Microsoft and its satellite pundits have assembled a seemingly plausible distraction/solution going forward: Windows 7 will boost sales of generic PCs back into orbit and erase the crater caused by Vista and the recession. They’re wrong, here’s why.

[...]

Microsoft is facing multiple competitors in the low end arena as well. One is the threat posed by free distributions of Linux and Android, which can potentially stand in place of Windows on low end hardware, resulting in major savings to manufacturers. So far, Microsoft has been able to scuttle adoption of Linux on netbooks by dumping Windows XP licenses on manufacturers for free. That’s obviously not a long term strategy, as Microsoft simply can’t run the Linux community out of business, nor can it keep giving away software for a growing segment of the PC business.

[...]

Mr. Ballmer, welcome to 2009. It’s not developers, developers, developers that you need, it’s customers, customers, customers.

It remains a sad fact that Microsoft uses a product which does not exist yet (Vista 7) to justify its fantasy about marvelous comebacks. ⬆

"[W]e're not going to have products that are much more successful than Vista has been."

--Steve Ballmer, 2008