On the heels of reports that tablet sales are significantly eating into PC sales, Charles Arthur at The Guardian estimates just how much lost money that will equal for Microsoft: about $1.5 billion of lost revenue and $1.1 billion of profits up in smoke. Ouch. As Arthur notes, departed software czar Ray Ozzie tried to warn the 'softies but they didn't listen.
And Microsoft still doesn't have a tablet strategy worthy of the name. It won't allow Windows Phone 7 on tablets. Nobody (to close enough approximation) is buying Windows 7 tablets.
Are PCs going away? No. But that's like asking whether radio went away when TV came along. It didn't – but the time and effort spent on listening to it was quite rapidly diverted to the new medium. Or you could look at it like VHS video v DVDs: VHS hung on pretty well, but DVDs turned out to be a better way to do precisely the same thing.
And in the meantime, there will be a billion-dollar hole in Microsoft's profits this year because it hasn't worked out what it should do. The price of not listening to Ray Ozzie is turning out to be high.
-The Guardian Tech Blog, March 8, 2011