Yeah, but quality at the low end had to be a trend they saw coming. Apple and Samsung commoditized high-end manufacturing -- you need a lot of expensive equipment to build iPhones and Galaxy phones, but that equipment is a lot less expensive when it's being sold off to make room for newer, more expensive equipment. So low-end manufacturers can buy it and start churning out high quality, low cost phones.

And I don't doubt that Microsoft can be #3 in the phone market; I just don't think it's a worthwhile thing for them to aspire to do as a company. They will be perpetually fighting for market share, and that will tempt them to leverage their other products in ways that forego other potentially more profitable strategies for those other products. The phone market is a distraction for them at this point; and I wouldn't be shocked at all if they spin off the entire consumer electronics division (including Xbox) in the next 5 years.