The Enemy Within

Another Directions on Microsoft analyst, , contends that Microsoft's size requires that it watch all sides. "Apple and Linux both create some pain for Microsoft," he says.

Cherry says that Apple will continue to threaten Microsoft on laptops, desktops and smartphones, plus has set the bar very high for customer satisfaction. He adds that "even if Apple does not gain market share, there will always be comparisons to its design and quality."

The threat of Linux, Cherry says, depends on how the consumer market moves, and whether or not corporations follow.

"If there is truly a migration to low-cost machines with less hardware resources, then customers may be more open to Linux than a version of Windows that is restricted only to work on the available hardware."