Huh? MS did ok in the nascent consumer market. RIM owned commercial, completely.
I had an iPaq in 2004 when we got married. It was like living in the future, where the future was a scaled down Windows 98 box. We took a one month road trip and was able to Priceline hotels on the road as we explored. Amazing device but not an iPhone.
Ballmer was so butthurt about iPhone he would berate people who appeared before him with one. As a customer, my boss and I were invited to a meeting with high level Microsoft people and asked to not carry iPhones out of respect.