I seem to recall that they used to be able to, not just compete, but dominate Apple products. They would still be able to if they listened to their customers like they claim to be doing.
I've said it before, and I'll say it again: if they made new interfaces optional, rather than force something they think people will like down their customers' throats, 8 would probably sell much better than it currently does.
Also, not trying to advertise Bing and Skydrive would probably help, too. Contrary to what their TV commercials tell us, Google is the most popular search engine, by far. Perhaps Skydrive is more popular than most cloud drives (mayby not, I have no clue), but most people I know don't really use cloud drives anyway.