The problem for Microsoft isn't that they didn't see mobile coming and Apple did like as article suggests. The problem for Microsoft is that their previous strategy of ruthlessly copying Apple's innovations and taking the market for themselves with a highly profitable licensing model was coopted by Google doing the same thing except Google gave it away. If you're looking for the old MS it's alive and well at Google, Samsung and Xiaomi.
Well MS lost mobile because quite frankly they didn't control the hardware, and for a time it seemed OK to simply provide software for them, but they couldn't push a specific idea out the door until it was too late. They were happy to provide an OS that did phone calls, text messages, emails and a few other small things.
They didn't quite see the big picture, it's not that they didn't see it coming (they were already in it), they just didn't think you could do so many things so well and that people would want to do it.
Google didn't control the hardware either though so I think that's selling it short.
MS lost because they weren't ruthless is copying iOS. Google won the licensed market because basically they dropped everything else they were doing in mobile (copying blackberry) and put it all behind copying iphone. Samsung did the same thing with their Galaxy line. These are the kind of moves 80's and 90's MS would do without blinking, they understood that "second place is a set of steak knives". But late 00's MS -- spoiled on decades of success and perhaps a bit cowed by EU antitrust -- couldn't pull the trigger.
Remember that Apple didn't control the hardware, until one day they did. Nothing they did with the iPhone couldn't have been done by Microsoft... just not under Ballmer's Microsoft.
Don't forget that Microsoft was iterating on Windows Mobile at the time that the iPhone released.
IMO, Microsoft (and other handset makers) focused a lot of their energy on the enterprise market. Looking at screenshots of early handhelds show productivity as one of the "bullet points on the box."
Apple had the luxury of approaching the phone market from the other direction. They've spent several years making the iPod, that a consumer-oriented phone was a natural evolution of that. They also knew how to sell it.
> The problem for Microsoft isn't that they didn't see mobile coming and Apple did
They did have a mobile operating system, a mobile .NET framework for application builders, and a bunch of early PDAs shipped with Windows Mobile.
Apple just managed to redefine the mobile market completely, and make Nokia, Sony/Ericsson, Research in Motion, Kyocera and others irrelevant. Those others were supposed to be producing hardware devices that would license Microsoft's mobile products.
So they had a vision, just turned out to be wrong.
