A mini-epiphany about Microsoft's future
The Reality: Microsoft generates 80-85% of quarterly EBITA from their enterprise businesses like Server & Tools and not from consumer-oriented Windows/Xbox/Windows Phone/Online Services.
What I think is Microsoft is playing the long game. Windows 8 will be like Vista in the first year(2012-2013) selling decent but not spectacular numbers of upgrades and new PCs/devices. Windows Phone will continue modest growth through the next year.
What I see happening is an overall transformation of the company. You can see it everywhere from the new look of the corporate website, the use of Modern UI everywhere, the Microsoft Stores, Surface, the innovations in Windows 8/RT. Ballmer has said Microsoft is a “devices & services” company. For now the services will prop up the company while they get the devices portion up to speed. A big component of this will be the upcoming Surface Pro(Jan 2013) and “Xbox Next + Kinect 2” in fall of 2013.
Remember Microsoft is getting $1 billion/year from Android royalties that gets funneled into Windows Phone development(mostly to Nokia right now). So from a financial perspective Microsoft can ride out this storm(lack of apps for WP and WinRT) until a critical mass of hardware + apps + cloud services(Outlook, Office 365, Xbox Music, SkyDrive) will mean that 2014 = The year of Microsoft in every sense of it.
Some people will say Apple & Google have leaped so far ahead of Microsoft in mobile that they can never catch up. But all I know is that Windows Phone grew from 0 to 120K apps in 2 years and WinRT has 20K apps in a year from 0. Windows 8 is the first full “cloud” OS from Microsoft. I see nothing in it from a technical perspective that is inferior to Apple & Google offerings except for lack of voice assistant.
I know this is a wall of text, but I see a lot of things happening and I believe that the real comeback for Microsoft will be evidenced financially in 2014. But the groundwork will have been laid starting in 2008 when they started on the MinWin project which makes Windows 8 & Windows Phone 8 possible and which might be the basis for the next Xbox OS as well. Look at Apple. How many years from 1997 did it take until they started dominating the tech industry profits? At least 12 years. Microsoft can do it in 6.