Microsoft has never been good at marketing to consumers. Over the years (including what Sir William calls the evil empire days), Microsoft has led the pack with innovation but abandons products for which there is not already an established market. They suck at educating consumers about how a new or better product can benefit them.
For example:
Microsoft Office - introduced in 1989 (RTM 1990), the suite was the first of its kind. Before that, people used Werdpurfekt, Lotus 1-2-3, Harvard Graphics and dBase I, II, III, IV, V, etc. Those apps all had different menu layouts, different keyboard shortcuts (critical in DOS days), and ZERO plans to enable OLE. But the reason Microsoft Office became the de facto standard had nothing to do with the superiority of the product, the unified interface scheme, or the roadmap regarding future OLE functionality. Most worker bees and managers opposed adopting Word and PowerPoint over Werdpurfekt and Harvard Graphics. It was the bean counters that forced them to do it. The accounting departments and finance geeks wanted Excel and bundling it with counterparts to the industry leading apps was a brief glimmer of marketing genius.
Products that could have succeeded but didn't:
MS Reader - back when the notion of separating content from format was still the stuff of student discussion groups and people who understand hex code, Microsoft Research Lab offered up MS Reader to display e-books. The problem was there were no e-books. The few titles they could offer in their library were those snagged from public domain titles provided in text-only format by Project Gutenberg. Oh, and there were no e-reader devices, so early adopters could only read e-books while perched in front of their computer monitors. Good times. Microsoft orphaned MS Reader long before there was cloud storage and handhelds that could have made the .lit format an industry standard.
Microsoft Money - sometimes it's little things that make one product better than another. Money was much more intuitive-to-use than the industry leader Quicken. Little things like having it format a contact phone number for you or AutoComplete a field as you begin to type. And sometimes it's big things like small business users of QuickBooks trusting Intuit when choosing their personal finance tools.
At the end of the day, Microsoft management is very selective about where they put R&D and marketing dollars. It seems if they can't have a majority market share, they surrender the field. And that is what I fear might happen to Windows Phone. My hope for the future of this superior product is that Microsoft is so heavily invested, they won't walk away.
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