You know what I think is funny about that is that Apple was late to the party too, but look at what they did to the market once they stepped into it. Same goes for the original ipod as well. There were plenty of mp3 players around before Apple introduced theirs, but they absolutely decimated the market. Actually, the term "decimated' really falls short of the mark by a wide margin.
The difference between Microsoft and Apple couldn't be more vast. The only market they've really been able to hold on to, mainly because of sheer momentum is the desktop, and office software. If Microsoft doesn't already own the market, and is the default choice made for users, they have a much more difficult time of it.
I suspect that may change somewhat in the future, with both Gates and Ballmer out of the picture.
They have a history of showing up late to the party. Just ask Lotus, Asthon-Tate, WordPerfect, and Novell.