As the post says, that quote by Ballmer is telling: "'Things work better when hardware and software are considered together,' he said. 'We control it all, we design it all, and we manufacture it all ourselves.'" This is a COMPLETE reversal of everything Microsoft has always been about (excepting I guess the Xbox), and if Microsoft's actions didn't deliver the "FU" to OEMs, then this explicit statement did. He seems to be saying "Apple was right all along," or at least "Apple is right when it comes to devices." This is a huge statement. The idea that a hardware manufacturer and vertical integration have won out in a world where software margins are so huge and hardware margins so thin is a sea change in the world of technology. Perhaps MS saw the death spiral of diminishing margins, the proliferation of a buyer-confusing myriad of options, and the continued failure to make iPad-competitive devices in the PC industry and decided angering OEM partners really didn't matter at this point. They saw IBM spin off Lenovo, and HP flirt with spinning off their PC division, and spinning off webOS. They saw that the value of these OEMs was diminishing enough to where they could threaten those revenue streams by offering their own hardware.
Despite being primarily an Apple user, I don't feel comfortable with this increasingly integrated model. It will be interesting to see if Microsoft can make the transition. It will be critical to be able to command greater margins than the OEMs can on the hardware, though Microsoft clearly will subsidize a platform in order to build out a network (as they did with Xbox). They obviously have the advantage of not having to pay licenses, so that will help. They will probably sell a lot of these--they have an inherent advantage. With a quality MS option, why purchase from a third party who probably can't compete on price anyway? This will hopefully mean purchasing power for parts, again helping margins.
The flow chart is a most thoroughly oversold piece of program documentation. -- Frederick Brooks, "The Mythical Man Month"