Would it provoke existing PC manufacturers to ship PCs with a Linux-based OS instead of Windows? I think we'd find it easier to buy a PC without Windows --- not what Microsoft wants.<p>Some PC manufacturers would doubtless shout "monopoly" and could credibly threaten to drag Microsoft through the courts, or even into antitrust again.<p>That said, I can see a niche for them in selling PCs with high quality drivers (and thus a more stable Windows). But I don't think it would be profitable enough to be worth it for them.
The margins on PC hardware are razor thin. It would take a major investment for little profit.<p>Also, Microsoft hasn't done a great job with the xbox 360. For example, the red ring of death problem on old models and the graphics flicker on the new slim models.