The latest version of Win 8.1, which is about to ship, apparently makes the desktop side much better where it is much more divorced from Metro. They are going to have to work on making metro much better for phones and tablets, where it still has too many legacy awkward to use systems which means iOS is still much better from a consumer ease of use point of view. They seem to have ended up with the worst of both worlds with Win 8.0 and are now trying to repair the damage.
IMO Microsoft has been forced into taking this action, where there Windows customer base has been shrinking rapidly and people have been upgrading to Windows 7 over Windows 8. In terms of computing devices Android has a over 50% of the market and growing, Microsoft about 30% and Apple most of the rest. 5 years ago Microsoft had about 90% of the market.
In the phone / tablet market again they have made an offensive move by making the OS free, where this is now dominated by Android, followed by iOS to try and gain some market share. Realistically it is too little too late where Android has too much momentum with a flood of different tablets at different price points expected in 2014 from Samsung, so there is one for everyone with Apple dominating the top end of the market. Samsung is using the same methodology they have used to dominate the smartphone market in terms of volume sales, whereas Apple have concentrated much more on maximising profits. Apple and Samsung are the only two smartphone manufacturers that are profitable.
On the 4th generation console front the PS4 is winning at a ratio of about 2:1, with more competition arriving for the smart lounge TV / entertainment market which Sony and Microsoft are trying to dominate from things like the Apple TV and the Amazon Firebox. The TV / film / entertainment market is going to be the next major battleground with the main winners being the consumers and the TV content providers and the losers terrestrial TV, satellite and cable companies. This is why broadband delivery and entertainment packages from BT and Sky along with other new entrants is being fought over so keenly. Where will PC's, laptops and Windows fit in this increasingly blurred computing device environment?
MS Office is their one bright spot, but this is also coming under increasing attack, by cloud services that include the providers office suite.
Now Microsoft have a new CEO who has been making these changes to strategy very quickly, so this may improve their lot, time will tell, but they are going to have to learn that ease of use and the customer is king, can they do that?