Microsoft is facing strong competition in every market and is struggling with it's corporate identity.
Apple is slowly eating into the PC market share with their laptop sales, and trying to erode market share by switching potential PC purchasers to tablets. NOT all is bad news in this arena though, of course: Windows is still the primary home and office OS of choice (by a comfortable margin) and Office is still the Standard productivity suite.
Additionally, the Smart Phone arena is an example of an opportunity that Microsoft moved too slowly on and now are suffering because of it, as they struggle to make headway with Windows Phone 7 (an awesome phone OS IMO). Finally, while the XBOX brand has successfully established itself in the US and UK, it is struggling to find similar success in other markets.
I think it would be hard to argue that anything I posted above is not mostly true (give or take personal spin). I do not however believe this means it's impossible for MS to rebound. It just means they have challenges to overcome; challenges that they have not historically had to face. To assume they are destined to failure because of those challenges though, is well a bit premature I think. Particularly as we are talking about a company that is fiscally sound, even with these challenges.
