You have to hand it to Bill Gates. He can recognize a potential threat to Windows when he sees it, and is never far behind with a response. The newest apparent threat to Windows is the $100 laptop being developed by MIT. The laptop will be running Linux, instead of either MacOS X (which had been offered for free) or Windows (which Gates has allegedly offered to Open Source for the laptop). If this project takes off, it would put millions of laptops into the hands of the developing world (read: developing market) which do NOT run Windows.
Microsoft has an alternative plan. They want to develop a SmartPhone (i.e. high-powered cell phone) running WindowsCE which can be adapted for computer functions using an external keyboard and television. This would put Windows onto every "computer" in the developing world, and ensure a whole new generation of Microsoft customers.
Of course, I find it unlikely that this can be produced as cheaply as the $100 laptop, though it is in line with the theory of many that the cell phone will become the computer of the future. Sort of the Tricorder of the next generation. And it undermines one of the specific goals of the $100 laptop - that its code can be freely modified by locals to encourage local entreprenuers to become technically proficient. Still, I can think of worse things than a free market battle to get practical computing power into the hand of every child in the Third World.
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