Sun melting down, and where's Java?
javaworld.com
javaworld.com
As for specialised hardware. Sun used to produce/specify the picoJava, microJava and ultraJava processor architectures (processors designed for Java).... They all tanked. The problem wasn't the implementation - it was timing. They came about just when the processor world was coming to the conclusion that the instruction set architecture didn't matter - AMD proved this by bolting x86 onto a RISC core (proved it by doing this, and then by winning the performance war for a number of years with it).
Problem now for Sun is timing again - the market combined with their market share. It will be a challenge to hold onto the market they've got, and a bigger challenge to grow into other areas.