All of those examples you gave are of something being overtaken by the next generation. The problem is that what Microsoft is going to make ISN'T next generation, its the same thing as an iPod, whereas Apple is already working on the next-gen iPod.
Microsoft's iPod equivalent is at the same stage in its development as the current iPod's replacement is at Apple. That's not how you take a market away from someone. Remember, MSN was supposed to destroy AOL, and it's been a flop for much the same reasons. Microsoft Passport? Yeah, that didn't work out so well. Microsoft's Actimates (where they took on Mattel) were a complete and utter failure. Microsoft has a track record of making this exact same mistake (designing to the existing competition instead of designing for the next generation) over and over when trying to make hardware or do something not related to their core competencies.
And FYI, Nintendo didn't have much of an installed base of current-gen consoles after SNES. They pissed it away with N64. And now that the next-gen consoles are coming out, it's pretty clear that the xBox was overrun by Sony's PS2. The xBox360 isn't doing so hot, either.