[citation][nom]killerclick[/nom]You don't get to decide what they want. Sales numbers seem to suggest that they want the iPhone. And the iPad. Sales numbers also seem to suggest that consumers don't want Surface, Windows 8 or Windows Phone devices.So? I paid $250 for the Nexus 7 and three months later it's $199. It's what happens, and it's what's supposed to happen.Every company is actively trying to improve their products, there are times when it pays to be conservative and there are times to go all-out and innovate. When you hold 90% of the market, that's precisely the wrong time to transform your core product. Microsoft got spooked by the success of iPad/iPhone/iOS/Android and since they can't compete on merit (compelling products), they're trying to drag their existing user-base into their failed mobile ecosystem. According to reports, it's not working, Surface is not selling well, Windows 8 devices are not selling well and WP8's white knight Nokia 920 is still available if you want to buy it (ie demand is not overwhelming).[/citation]
Smartphone sales: Q2-2011 through Q2 2012
http://www.engadget.com/2012/07/27/idc-samsung-and-apple-ship-almost-half-of-all-smartphones-but/
Nobody expected the Surface to sell as well as other devices. Microsoft designed it to set the bar for other companies. Even if they don't sell, Microsoft will make a killing in OEM fees for other Windows 8 devices.
As for the iPad 4, the biggest issue is that Apple released a device that is twice as fast shortly after most consumers started switching to iPad 3, for the same price. That is not even close to the same scenario as the Nexus 7 getting a doubling of storage capacity for 50$ more.
I whole-hearted disagree when you say that Microsoft picked the wrong time to change Windows. 90% of the market share means you can afford to lose a few percent because of consumers being resistive to change. Microsoft did not get spooked, they are trying to move into a market that they previously have had little success in. Of course they expect growing pains and lower revenues. WP7 was wildly successful with people who couldn't afford the other more expensive smartphones. Maybe not as much in the US as the rest of the world. As for the WP8 devices, the adoption rates are increasing dramatically as more SKUs become available. The 820 is doing well, and as other manufacturers start selling their WP8 devices, we will see even better sales.