A better example might be Polaroid.
They had unique technology. They were the world leaders in their field (instant photography). They were able to protect their lead in the face of competition from a larger rival (Kodak).
But technology changed around them. They certainly could see it coming, and they knew their traditional rival and many big semiconductor electronics companies were investing in it.
But they failed to change in the face of the steady development of large, inexpensive, CCD imagers.
They also had quality control problems that annoyed the customers of their oscilloscope and microscope cameras (e.g. it was rare to get a box of Type 53 B&W film that had 10 good exposures). And at $1+ an exposure, their customers were pushed to investigate other options.
MS is able to change on a dime compared to companies that sell real things with an established technology base. MS's monopoly tax allows them to invest in dozens of alternative futures, something that most companies can't.
I wouldn't count on MS failing. And even if they do in their software stuff, they'll be around in some form or other, taxing the industry as much as they possibly can. E.g. they're doing their best to gain complete control over the hardware specifications.
My $0.02.
Cheers,
Scott.
