For a broader understanding of what MSR does, check out their work on quantum computing ( http://research.microsoft.com/en-us/research-areas/quantum-c... ) and functional programming (Microsoft Research Cambridge and MSR-Inria are good places to look into for this). That's just the tip of the iceberg, Microsoft plows plenty of resources into R&D. The fact they invest in fundamental research isn't something to attack, it's something to celebrate, not all research needs to result in a tangible product.
http://techcrunch.com/2014/11/07/mac-achieves-highest-u-s-pc...
http://www.idc.com/prodserv/smartphone-os-market-share.jsp
Did Android obliterate Apple? That margin is about 60%.
Yes, Microsoft screwed up, but they can always turn it around and grab a quick 10% share. They've got tons of money and talent. I'd never count them out. In fact, they're still pretty dangerous.
"could", you mean "can't." They've been trying to grab 10% market share since the iPhone pushed them below that, and have never recovered, in spite of having the best resources of anyone out there.
R&D, by virtue of being R&D, rarely makes it to the market in a recognizable form. My guess is that the lessons learned there certainly have been applied to their real profit centers.
I acknowledged that they are successful. But they aren't successful in creating new markets; they succeed in invading existing ones.
PS - I don't personally like software patents, but you cannot deny they make money for research-based organisations.