@Charles: The problem with your comparison to Xbox is that Microsoft Had complete control over the Xbox. They had control over the hardware and the accessories. They even have a certain control over the games that were coming out. So it's no wonder it was a success with the type of control that MS could exhort over the production of the Xbox.
The problem with phones, MS once again took the hands off approach... Sure you've developed a nice looking OS, i've had the pleasure of using my mates Samsung Omnia 7 and it is a gorgeous OS. ANd sure you told the manufacturers you're only allowed to make phones that look like this with these specs, but you're not really producing the phones or the experiences. The problem i see is that you're aiming for a mass market phone with different manufacturers but not allowing the manufacturers to shine.
MWC should of been the place to sing, and MS messed up. There were about 5 different Android phones announced and released soonish after, that I want. Nothing came from MS or it's partners. No new phones. My contracts almost up and I already know which Android i'm going for because I don't want 5 month old hardware. If MS wanted to go down the one phone a year route then you should be doing it alone. When i look at Samsung i expect a new phone every few months.
Xbox is fantastic and most people rave about Zune hardware. Microsoft produces brilliant hardware, and you should be doing that for phones, or you should take the guards off the manufacturers and let them bring out as much hardware as the Android system does.