Microsoft’s Windows division is still a monster: Over the past year, it has generated $12 billionof operating income on $19 billion of revenue. A big part of that is because of Microsoft’s continued dominance of the PC operating system market, with more than 400 million Windows 7 licenses sold cumulatively.
But as the industry shifts toward tablets, the story gets less certain for Microsoft. With different economics and pricing for tablets than PCs, how will it build a meaningful growth business? It may need to figure out a new model. Or it may just shrink.
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