Bottom line:
Microsoft is just like anyone else...the company will go where the money is.
Only a little bit slower. herbertsnow's comment actually made me think a little bit about this (I only talk about customer based products, I don't know much about their business products).
Smartphones
Microsoft had an awesome smartphone OS, Windows Mobile. When Apple released the iPhone it was a dumbphone, it had laughable features in comparison to Windows Mobile and everybody thought, why would the normal customer need a smartphone anyway? Microsoft felt safe and sound with its business mobile offerings.
A few years later, things had changed. Apple made the smartphone good and everybody wanting one, and Android was already trying to catch up. Microsoft had still Windows Mobile in pretty much the same state as before. So they panicked, they released Windows Phone, a for the times very refreshing design on top of a... dumphone. They didn't even take the time to implement basic functions like copy & paste. They rushed this thing that much, that they started to move the platform to the NT kernel pretty much in parallel. No wonder there were almost no new features for either Windows Phone 7 or Windows Phone 8. It took them 4 years to release the first real feature update, and they still haven't caught up.
Tablets (and Desktop)
Nobody wants a tablet. Microsoft knew back in the times, after all they released multiple of them running Windows. When Apple came and presented the first iPad it was seen as a joke. Who would want such a thing? But people started to buy it. Again, Google tried to catch up pretty early, with in the beginning terrible products but they took their marketshare over the years. Microsoft again ignored this development for a long time, until they decided, woah, there's a market for tablets out there. Only that they didn't have an ecosystem. So they thought they are clever, they put a touch input surface on Windows 7 and included a closed Store. People need new computers, they would eventually get Windows 8, they would hopefully get used to it and with this huge user base people will start to use the apps that also run on tablets! They also compiled Windows 8 for ARM, but as they had no Office app (the touch iPad app is more important after all), they left the desktop to run the ARM compiled Office.
Unfortunately, the people who bought Windows RT tablets got confused and people buying a computer still wanted to use their mouse and keyboard.
This lead to pretty much the end of RT tablets and made Microsoft to bring back the Windows 7 interface step by step.
Of course there came one good thing out of it: Tablets that can run a full Windows. I give Microsoft that. Let's see how successful they will become over the years.
Xbox One
That's a very good example for "going where the money is" but only in a very small pace while breaking every promise and changing every thing that "can't be changed" on the way. DRM and Kinect are the keywords here.
Office
I really don't know how Office 365 has caught on. I haven't heard bad things about it. I think it's great. So one customer product I really can't say anything against ;-)
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All of this is of course how I see these things. I really might be off here and I'm sure you'll tell me your disagreement
Edit: I almost forgot to include the smartwatch they discontinued in 2008 ;-)
http://www.cnet.com/news/time-runs-out-on-microsofts-spot-watches/