When MS is cornered (when they are losing in one area or another), and they are determined to win the competition should be scared. They are very good at committing to a project, and being in it for the long haul.
How so? I can think of several projects (especially hardware) that they abandoned after the first version. Granted, they gave the Zune a fair shake (though I don't think the iPod had much to be scared of). SPOT, too, considering that smart phones were starting to get useful about a year after SPOT's release.
But as a counter example, I know of one unreleased hardware product they're working on right now that stands little chance of going beyond V1 due to (without inappropriately saying too much) a lack of commitment on MSFT's part. Could be that in this case they're not "determined to win", but I'm not in a position to know how determined they are.
As for unreleased products: I think that is an orthogonal discussion.
Nobody has yet mentioned Microsoft PlaysForSure. Those clowns really screwed the pooch on that one. They got their "partners" to commit to a form of DRM that the Zune (brown bar of turd) didn't support and that Microsoft then abandoned.
How's the "long haul" working out for that particular fiasco?
Sorry if this sounds like a rant (which it is). But I don't understand how Microsoft's numerous mistakes keep getting erased into the mists of time. This wasn't something that happened eons ago. PlaysForSure was introduced a mere ten years ago.