Here’s why Microsoft will never be the thought leader and innovative leader they think they are (note: Competitive Advantage here for startup). From an interview in Forbes with MS Robbie Bach:
Can we expect a Zune phone next?
Right now, I can tell you that the Zune team is really focused on producing great innovation in the music device space. When you have a guy who has 80% market share and has sold as many devices as Apple has, you gotta be focused on home cooking, so to speak. I wouldn’t expect there to be much focus beyond what we’re trying to do in the core music space.
That is the mindset – around each one of their product suites – and you can see that play out in their incremental changes. Gotta take care of the cash cow first, innovate second.