Re: No surprise
It's true that hardware margins aren't as high as software margins, as a general rule. But Apple still achieves pretty extraordinary profit. So too, since it was brought up in some of the comments, does Cisco.
I sympathize with Mel's indicated point about double standards; it's almost like people expect healthy hardware margins to be definitionally short-lived, whereas software margins are seen as potentially eternal. I can see why that bias exists in the abstract, since it's easier to move quickly and adapt as a software-reliant company than it is as one that also relies on hardware. But if anyone has earned some respect in this regard, it's Apple. I still remember when everyone thought Apple was a short-lived "anomaly" during the height of the recession, when its stock price was half what the post-split price is now. Says something about what analysts know. Maybe Android's huge installed base will lead to future glory as users in emerging markets upgrade, but I can tell you right now, in the present-tense, all that market share doesn't mean squat compared to the real dollars and real user-investment iOS is achieving.
That said, I think Microsoft's problem is more complicated than "no one wants their stuff." That might have been, by and large, the case when Windows 8 and Windows Phone 8 both debuted. I used each OSes extensively, and speaking as objectively as I can, neither was nearly as satisfying as OS X or iOS. Windows 8.1 and Windows Phone 8.1 are better, however. I still prefer the Apple OSes, but I don't think Microsoft's UI is a reason to avoid the platform anymore. I once would have had trouble recommending Windows 8 devices to people, especially if I was talking to someone willing to shell out for an Apple product. But the newest Lumias and the Surface Pro 3 have legitimate merit. I don't think they beat Apple's products, per se, but Microsoft has closed some gaps, from a functional standpoint. From a PR standpoint, however, is another matter-- which is probably why Microsoft will ditch the "Windows 8.x" branding and move to "Windows 9" - or perhaps even just "Windows," to reflect the multi-form factor, rapid-release model Microsoft is going for - early next year.