I mentioned something about this in the recent iPad love it or hate it thread...
Microsoft have been telling us tablet form was the future, yet they did nothing about it. It is true they provided the software, but there really wasn't a manufacturer that could drive the tablet form to the masses.
It amazes me that Microsoft didn't produce the entire device hardware and software, they saw a gap in the games market and introduced Xbox, why didn't they invent the device that they obviously saw was going to be the future?
Someone at Microsoft slept in. They could still challenge the iPad if their device has a "real" os and comes with a more attractive price tag.