They misstepped with WinMo. Then they rebooted. Start your count over again.
The problem with consoles is that there's no brand loyalty (except for Nintendo). It only takes 1 bad console for an established player to vanish, and 1 good console for a newcomer to succeed.
Xbox live might be changing that, but it's still waayyy too early to call it either a success or failure. Though, certainly financially, it's been a small disaster so far.
[1]http://www.winsupersite.com/article/networking/time-running-...
But I don't think that's a very holistic viewpoint. Despite how terrible Windows Mobile was, it had a good hold of the market until the iPhone came along. It wasn't really a "failure" until it started declining in 2008. Microsoft's response, Windows Phone 7, was a complete reboot of their mobile line, and we have yet to see how it will perform in the long run.
it's pretty much a failure.