The retreat from consumer products

<p>It has always been my belief and hypothesis that Microsoft has never actually been a "consumer" company, but that's a long and complicated thing.</p><p><br></p><p>In the context that you put it, the downfall of Microosft as a consumer company can, in my opinion, be traced back to 2006 and 2007.</p><p><br></p><p>In 2006, Windows Vista was released. And while Vista was 100% fine on high end PC's ($1500+ devices) of the time, the fact that Windows XP was 5 years old at that point and ran really well on $600 PC's meant that consumers were used to PC's at that price that could run Windows well. Windows Vista did not run well on cheap PC's of the time, and that resulted in a very negative perception to consumers. That was Vista's downfall more than anything else, and it really soured people on Windows. (There are other factors here, like this being the time when Apple was just finished transitioning to Intel and had some great hardware products at the time)</p><p><br></p><p>Then, in 2007: the iPhone. Microsoft had nothing to compete with it. Even with the first iPhone actually not being that great of a product, the seed was planted, and the 3G in 2008 started the steamroll. But in 2007 the true transition to mobile began, and Microsoft didn't have an answer.</p><p><br></p><p>By the end of 2007, Microsoft had an operating system that the consumer market, by and large, hated. And Microsoft was faced with a competitor in the Mobile platform with a far superior core product that would go on to eat it's lunch, and had to start at zero making it's own competitive offering, which came way too late.</p><p><br></p><p>So, Microsoft had an undesirable PC operating system, and an undesirable Mobile platform. That was the end on the consumer side. Windows 7 came in 2009 and was a success in that it ran well on midrange PC's of the time. But by then, Windows was already starting to become "the thing I use because I have to/the thing I use for work." It wasn't going to move the needle like a mobile device could, even back in 2009. And by the time Windows Phone 7 finally came, not only was Apple on the iPhone 4, which really was a revolution in smartphone design, the app store was maturing, and it was a wild success. And don't forget, Android was already huge by 2010. It was on Gingerbread 2.3 and was well on it's way to becoming a dominant platform. At that point, it didn't matter how good or bad Windows Phone 7 was. It lost before it even hit the market.</p><p><br></p><p>If Windows Vista hadn't been the tire fire that it was on midrange devices in 2006, or Microsoft had had *some* kind of product that was at least competitive with the iPhone in 2007/08, maybe things would be different. But, they didn't so here we are.</p>