Linux on the desktop is still very much an operating system for people who like to tinker with their computer more than they like actually using the thing. There is a lot of support out there for someone wanting to use Linux (the support community is one of the best that I've ever come across). But having to turn for support regularly becomes real old, real fast.
By comparison, Windows and Mac OS X just work ... at least most of the time.
So, if Linux on the desktop isn't going anywhere, what can be done with it?
Well, how about what's already being done? By melding together Android and Linux, what you end up with is a fantastic development platform for Android. Currently most Android developers use a customized version of Linux developed by Google that features an interface resembling Java. Integrating Linus Torvalds’ version of the Linux kernel with Google’s Android version gives Google a lot of control over Linux. But it also gives Android developers a far better, friendlier, more customizable development environment for Android apps.
In fact, it's giving all Linux users the chance to become Android developers.
Essentially, Linux becomes a development platform for Android, and Google just opened the door to a whole new pool of potential app developers.
There's another effect of merging the Android core with the Linux core, and that is that Linux, a platform that has effectively been ignored by mainstream users, is now starting to morph into Android, a platform that has enjoyed considerable success.
It's paving the way for Android apps on Linux, which essentially means that Linux is morphing into Android. Linux is an unknown in the consumer market, but people are buying Android smartphone by the millions every week (and, to a lesser extent, Android tablets). We have Android on various platforms already. It's not a huge leap to see it making an appearance on PCs.
We're now moving into a post-PC era where even Microsoft and Apple are seeing their desktop market share being eroded away by mobile platforms. The desktop PC is already showing signs of waning, so it's unlikely that Linux is going to be making any kind of headway on that platform.
The year of the Linux desktop didn't materialize, and now it won't. The future isn't Linux on the desktop (or Android on the desktop for that matter) but Android on smaller, more personal, more intimate devices such as smartphones, tablets and other consumer electronics.
Linux will live on, but it will be known as Android.