If you google [microsoft flop] you will get many overlapping examples. Kin shows up, of course. As does Vista, as does Zune. And that latter day tablet product that never was. And the other products of MSR that never quite make it to stores. Consumers are not dumb. They are aware of these high profile collapses.
And there is a general trend of lagging the market, then failing to catch up. This more than anything explains the performance of Windows Phone in the market.