Truly, for senior management, the problems didn’t make sense. Microsoft had some of the smartest people in the technology business. It had billions of dollars at its disposal, and the ability to throw that money into any project the executives chose… Current and former executives said that, each year, they tried to explain to Microsoft’s top executives why the company was struggling in the quality of its innovation compared with Apple… Exhibit A: today the iPhone brings in more revenue than the entirety of Microsoft… One Apple product, something that didn’t exist five years ago, has higher sales than everything Microsoft has to offer. More than Windows, Office, Xbox, Bing, Windows Phone, and every other product that Microsoft has created since 1975. In the quarter ended March 31, 2012, iPhone had sales of $22.7 billion; Microsoft Corporation, $17.4 billion.
In a lengthy piece, titled “Microsoft’s Lost Decade”, Kurt Eichenwald of Vanity Fair profiled CEO Steve Ballmer and his role in the company’s steadily decreasing dominance. The piece includes interviews with current and past executives of the company, thousands of internal docs and legal records, and, not surprisingly, Apple’s role in the decline of Microsoft makes up a large part of the story: