With the Windows Vista flop, M$ tried to position itself to compete directly with Apple on image alone. Undoubtedly, the Vista eye candy was in impressive display as are the animations of OSX. Having used a MacBook Pro for over a year now, I can tell you that I am less and less impressed by Apple by the day. Perhaps the biggest reason is that virtualised Windows under Parallels seems to run faster and more cleanly than all of the Mac applications. OSX I end up just using as a shell in which I run Windows. Everyone loves to slam Windows, but XP runs stably, quickly, and very easily. Compared to Linux, getting something to run just as you want it in Windows is a real breeze especially for the amateur. This has much to do with market share and demand, but some credit has to be given to good design also.
M$ is now aiming to compete directly with VMWare in the Virtualisation market. A wise move. By the way, VMW is a really good short and I am going to start buying Put options. I did not track the dot com era stocks much at the time, but this is a classic dot com irrational exuberance or simply a misinformed market. Dont get me wrong, they have a great product, but they also have much powerful competition right on their tails (Citrix, M$, Parallels). They are already giving their VMWare Server away for free. How could the market capitalisation then be anywhere near Adobe? Remember you heard it here first.
Back to M$. The one thing I still respect and cannot take away from Apple after all the pretty graphics and sexiness has lost its lustre: it is based on Unix, ie FreeBSD. It is therefore able to run any Linux application with an easy to use front end and the possibility to Virtualise or incorporate M$ products. In other words, it is a computing Superset. This flexibility alone makes having an Apple somewhat justifiable especially for scientists, quantitative researchers, and anyone in Graphics Editing.
M$ could close this gap and take back some market share from Apple by taking a few years to completely rewrite its OS this time with a Unix kernel following Apple's lead. I believe there are intelligent people in Redmond and working for M$ in India and China who still have much to offer humanity be it in OS, personal or industrial intelligent devices, other periferal software, etc. They yet could sell an OS which would be far less the disdain of computer geeks everywhere and which they actually might start to prefer above other Unices (OSX, Ubuntu, Fedora). It would be a bold and risky move to radically change course as I proposed. They should either do this and have hope of long run survival and even leadership, or they can suck out whatever is left from their current OS whilst pursuing something entirely different and dooming themselves to eventual irrelevance, hopefully still returning significant value to stockholders in the meanwhile.
As a closing thought, I used to think like one of those geeks unsatisfied with closed-source models of mediocrity, or perhaps just like an economist opposed to monopolies. However, M$ can no longer be considered a monopoly and their products, closed source though they may be, are much more stable than they used to be. I therefore have for the most part lost my disdain for them.