While this article is written ahead of Microsoft’s investor conference call for their most recent financial quarter, they are confronting a wealth of problems that cast a huge shadow over the company’s future prospects. Yes, they will continue to earn high profits from the sale of software and sales, but the PC market has changed, and it doesn’t appear they fully grasp the consequences.

When Apple reports Mac sales next week, it will be clear that more and more people are avoiding new PCs and buying Macs instead, or possibly iPads. Market leaders Dell and HP are suffering from declining sales, and more and more companies are offering Macs and iPhones to employees to, in part, convey a sense of being contemporary. PCs are yesterday’s news.

Sure, Microsoft is making a big deal over the release of Windows 8 later this year. But their priorities are peculiar. While Apple built a special slimmed down version of Mac OS X, dubbed iOS, designed strictly for mobile gadgets, Microsoft isn’t quite sure how to emulate that approach. They have repurposed the failed Metro interface from the Zune and iPhone and made it the face of Windows 8. But it’s just window-dressing in the worst sense of that pun. Beneath that overlay, it’s still just plain Windows.

Yes, Microsoft is building a version of Windows 8 for ARM-based hardware, no doubt in response to Apple and Google, but that doesn’t guarantee success. After all, Windows apps still won’t run on the mobile gear. It’s an issue that some members of the tech media never seem to understand. Microsoft often announces intentions to do something, but there’s never a guarantee that the promised product or service will ever appear. Even if the product does appear, some features may vanish with empty promises that they’ll return in the future. Take a look at the original feature set for Windows Vista and you’ll see what I mean. But how many members of the media called Microsoft for their constant failure to deliver?

This year, the Zune digital player was cancelled. As the iOS and Android OS continued to dominate the smartphone market, Microsoft’s Windows Phone was saddled with a single digit market share and stagnant growth. Although Nokia is starting to market smartphones with Microsoft’s OS, that’s no guarantee of success. Nokia has only been doing well with less profitable feature phones.

When it comes to smartphones, it’s actually hard to see where there’s room for another player. Both Apple and Google’s Android partners have carved out substantial shares of the market. Even assuming that Apple garners more and more victories in their ongoing legal battles against Android licensees, at best the losers will just remove or redesign features to avoid possible patent infringement. Some suggest Apple will license some of their less critical intellectual property and, as Microsoft does now, get a check on nearly every Android smartphone sold. Indeed, it may well be that Microsoft is making more money on Android smartphones than for licensing Windows Phone.

However, Microsoft appears, on the surface at least, to be utterly tone deaf about such considerations. They continue to tout a Windows-anywhere strategy, imagining that the next generation of tablets with the ARM version of Windows 8 will somehow fare better than previous Windows tablets. This in a market where the iPad is king, and the Android-based Amazon Kindle Fire and Barnes & Noble Nook are pulling up the rear. The rest of the Android contenders are going nowhere, and there are published reports that RIM might be trying to sell off all or part of the company.

This doesn’t mean there isn’t room for more competition, or that Microsoft is a paper tiger. Clearly the company has had a long ride on the top, and Windows still powers the vast majority of traditional personal computers around the world. But that share drops considerably if you regard smartphones and tablets as PCs too. So Microsoft must find a way to embrace the future before they become a relic of the past.

Sure, Microsoft has done pretty well with game consoles and related gear, but Apple has demonstrated that the iOS is a more and more compelling platform for gaming. The titles you buy at the App Store are far cheaper than the ones you buy for personal computers or dedicated gaming hardware. The biggest developers are on board, so what is Microsoft to do?

It may well be that Microsoft’s worst problems are top-down, and that Steve Ballmer and his executive lieutenants are poor managers who haven’t a clue how to fix the company’s problems. Even if Ballmer was ousted, or left voluntarily, that’s no guarantee that Microsoft’s future fortunes will of a sudden turn around. That might take someone who isn’t afraid to make major changes, as Steve Jobs did in 1997 when he took over Apple.

Sure Apple then was close to failure when Jobs returned. Microsoft can continue in the same groove and remain highly profitable for years to come. But the handwriting is on the wall. I only wonder if Microsoft’s leadership will read the warning signs before it’s too late to recover.

Although most of the attention on Apple in recent years has focused on Steve Jobs, Tim Cook, and product designer Sir Jonathan Ive, yet another executive has loomed as a star in Apple’s bullpen. These days, Scott Forstall, no stranger to Apple’s media events, works as a senior vice president in charge of the iOS. That’s a serious job, inasmuch as the iOS drives most of Apple’s sales.

So what’s the story about Forstall? Well, getting serious coverage these days is yet another book about Apple, “Inside Apple: How America’s Most Admired — and Secretive — Company Really Works,” by Adam Lashinsky. Unlike the best selling biography of Steve Jobs from Walter Isaacson, Lashinsky’s book is definitely not authorized by Apple, and it’s clear they must be uncomfortable with some of the content. One huge example is the report that Forstall has the hots for the CEO spot.

Certainly Forestall has the right background. He came to Apple by way of NeXT, becoming one of the key architects of Mac OS X before moving on to the iOS. In many ways, he is regarded as a Steve Jobs in the waiting, with an obsession to detail, and a credible skill as a presenter at media events. Certainly, I’ve seen him on stage at some Apple presentations, in person or via an online feed, and he does appear to have the chops to deliver the goods in a public setting.

Recalling Jobs and his severe treatment of employees, Forstall is also described as being quite difficult to work with, resulting in the departure of some executives. Supposedly he’s also been consolidating his power in the hopes that, some day, he’ll replace Cook when the latter moves on or retires.

All right, reports of political byplay in major corporations are nothing new and not uncommon or unexpected. No doubt there are other executives who might wish to assume the top spot some day. Certainly, Sir Jonny has been named as a potential CEO candidate.

But I don’t presume to be able to read anyone’s mind. Since Lashinsky’s book wasn’t officially sanctioned by Apple, I very much doubt if he had a chance to speak to current Apple executives on or off the record. No doubt he got his information from examining the public record, and speaking with former Apple employees or perhaps competitors to paint a picture of what goes on behind closed doors.

Besides, touting exclusive material about internal discord at Apple is bound to sell books. It has certainly drawn attention from the mainstream media. Evidence of a chink in Apple’s united front would certainly be a compelling story — at least if it was true, and I honestly have no idea what to make of it.

Surely, there are egos aplenty in any large and successful corporation. At the same time, smart executives surely know that they have to keep their ambitions in check if they want their employer to succeed. Apple went through a tragic period where corporate egos clashed, resulting in near failure of the company. When Steve Jobs returned, that failure was weeks away.

I would think that, regardless of his needs and desires, Forstall is smart enough to know not to do anything that would hurt the company. If his ambitions become too naked, he could risk repercussions from other executives, particularly the CEO. Apple must work as a tightly-knit team for the entire enterprise to succeed.

Then again, corporate politics has to be about risk taking. The executive on the move has to know when to swing and when to hold back. However good Forstall may be at his job, few employees are irreplaceable. There are no doubt other people at Apple, coming up through the ranks, who are potential executive material, perhaps even CEO candidates at some point in time. If Jobs’ plans to continue to embed the Apple Way into the DNA of key employees has been successful, that would be a given.

It would also be dangerous for an ambitious executive to push to hard too fast. If that executive doesn’t get what is desired, would such a person look elsewhere, or do something that would impede the company’s success?

But it’s also possible that Forstall’s ambitions and history at Apple are being amplified in order to sell books, and spread a story that isn’t quite true. I wouldn’t presume to know, but certainly Tim Cook is a savvy enough executive to know that vultures may be circling, that he needs to watch his back very carefully to make sure his authority, his goals, and his work isn’t being somehow hampered by people who have the own agendas.

Certainly, Cook is legendary in the business as a hard negotiator, particularly in dealing with Apple’s suppliers. I expect he is just as wary in working with his key executives, knowing full way that some might be delighted to take control if the opportunity arose. I wouldn’t be surprised if that was true even when Steve Jobs was in charge.

All right, you know that I’m quite skeptical about whether Apple is really going to get into the TV game. It’s not that they wouldn’t do a great job developing such a product. It’s not that it wouldn’t be super easy to use and deliver a great picture. The issue is whether enough people would buy such a product, even if the price is highly competitive, and that’s a numbers game that Apple knows very well.

You see, today’s TV sets are reasonably easy to use, although the initial setup process might prove a tad daunting. This came to the forefront in a reader’s comments the other day, pointing out that, after setting an external home theater audio system, the set’s internal speakers were still audible. It doesn’t seem that TV makers are aware of the fact that, except maybe for highly overpriced the Bose VideoWave, the internal audio system is nowhere a match to the quality of the picture. Lots of users are going to connect the set to an external audio system, and the act of establishing such a connection ought to automatically disable the internal speakers. But that rarely, if ever, occurs, or at least I’ve never found a set where connecting something to an external audio output mutes the speakers. Yes, it happens on a personal computer, so you’d think TV makers would have read the memos.

Perhaps the TV makers could ask that question during the setup process: Do you plan to use a separate audio system with your new TV? Press Yes, and the internal speakers are disabled (though they can be switched on later if change your mind).

But that may be just the tip of the iceberg when it comes with the new TV setup process, or what you might encounter when you add something new to your system. Now when it comes to a cable or satellite set top box, unless you opt for the do-it-yourself installation — in which cause I hope and trust the instructions are clear enough to properly guide someone who isn’t a power user — an installer is going to do it all for you. If you want to integrate your remotes with the one provided with your set top box — and that probably applies to many users — they will handle it for you, or should. Most TV sets, home audio systems, Blu-ray players and so forth should integrate nicely. Well, except for an Apple TV, which as its own unique remote control layout.

Regardless of how well the remote is integrated with your various components, that’s where matters get the most confusing. The volume control of the audio source, whether the TV or an external audio system, should reflect the volume control selection on your remote. This isn’t a given, and not all remotes manage this chore. You also want to find a way to turn everything off at once, rather than have to choose one device, press Off, choose another device, etc. Cable and satellite remotes will often manage this chore for the TV set and the proprietary set top box, but probably not the sound system, the Blu-ray player and the other gear.

When it comes to a reasonable degree of integration, the Logitech Harmony remotes are fairly good. The ones I’ve used are programmed via an app on your Mac or Windows PC. You pick the make and model of your TV, set top box, and other gear, and a preset configuration will be loaded. I was able to make this setup function reasonably well with a Panasonic TV, Bose sound system, and Samsung Blu-ray player, with a singular exception noted below. Since the Apple TV doesn’t have a physical on/off switch, I only needed to switch to that output, but it doesn’t seem as if the Harmony can replace the functions of Apple’s minimalist remote, which isn’t a favorite of mine anyway.

Logitech offers a visual display of the inputs to which you want to switch. A monolithic on/off switch will only turn on the components you’re using, but not the others. This sort of works, although, when switching from the Blu-ray player back to the satellite box, the player isn’t always turned off. It’s set to work that way, but maybe Samsung’s internal configuration is too stubborn for a Logitech.

Understand that the task of input switching, turning your gear on and off, and the other functions, are fairly basic. Once you get accustomed to the routine, it’s not so bad. Issues arise when you add more gadgetry, and the overall approach could be a lot better. Here’s where Apple might make a difference. If Steve Jobs truly “cracked the code” of simplifying the setup and use of multiple TV-related gear, that could be a major improvement.

But the job of simplification wouldn’t work if it meant that the Apple integrated TV did everything. Sure, Apple may prefer that you stream content from iTunes or one of their partners, such as Netflix, but the fact of the matter is that tens of millions of you have Blu-ray players, gaming consoles, external sound systems and other gear that needs to be properly configured and integrated. Is Apple preparing a whole living room solution that will encompass all these products, and simplify their use? Would you just tell Siri, “switch to the Blu-ray,” and have it do everything in the background, including turning off your cable box if you have one? Would you then say, “Siri, open the tray” to insert a disc?

Using your TV set with a standard cable or satellite hookup can be done without much complication. As you add gadgets to the mix, setup and regular use may present obstacles. If Apple can solve that with a TV set or Apple TV on steroids, it would be a boon to a saturated industry. But whether enough people would appreciate Apple’s high level of simplicity and elegance enough to spend a bundle on a new TV set remains an open question.

According to published reports from the mainstream media, Apple’s contract factories have already begun to ramp up production of the iPad 3 for expected introduction in March or perhaps April. Gone are rumors that the release will coincide with the birthday of the late Steve Jobs, February 24th. Apple simply doesn’t observe anniversaries, and one involving their co-founder won’t make a difference.

What makes this sort of speculation more intriguing is the fact that it didn’t come from a Mac rumor site. One of the more interesting reports, which appeared at Bloomberg, mentions a “high-definition screen,” attributing the story to “three people familiar with the product.”

Before considering the details, you have to wonder what three people Bloomberg is referring to. Certainly any respectable — and not-so-respectable — news outlet will protect sources. But only people who actually work at Apple, or one of their suppliers, would have accurate information to present. It may well be that, as I’ve long suspected, Apple executives are privately briefing certain media outlets about future product plans, so long as they aren’t directly quoted.

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