Chris

I think it's simpler than that, Stu. Apple's brand has cachet. Whatever you think of the technical performance or spec of their products, the one thing they have done better than any other technology company anywhere is make their stuff unbelievably cool and desirable.

Microsoft has deceived itself that it enjoys a similar reputation, thanks to the mass appeal of Windows. But that's not the case. Windows is self-perpetuating; it is ubiquitous, therefore it continues to be ubiquitous. Once you get away from the distorted market for operating systems and office productivity software, MS has to face up to the reality that they don't make cool stuff, and people aren't going to rush out and buy their stuff just because it has the MS brand on it.

They have to work as hard as any other new entrant to any market they target. You would think that shouldn't be hard for them; they have so much cash they should be able to bring whatever resources they need to bear on anything they choose to do. Unfortunately, there is more to it than resources. Corporate culture plays a big part, and Microsoft's culture, thanks to the dominance of Windows, has come to be one where they think that whatever they do, must of necessity be the right thing. They're used to telling the customer what the customer wants, not competing and innovating.

The Xbox is a rare exception to this. The fact is, unless and until that culture changes, there is a high risk that anything else they invent will go the same way as the Zune and now the Kin.