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Ummm.. the super advanced Microsoft Surface Computer, which has touch screen technology that totally trumps anything that the iPhone has, started development work as long ago as 2001, and was first shown to the public in 2007.

Why on earth did Microsoft sit on this fabulous, super advanced innovation? Is it because it was a big-@ss table? Or is it because of patent disputes with Apple?

“Why on earth did Microsoft sit on this fabulous, super advanced innovation?”

It’s been deployed in lots of firms actually.
Here, have a look.

http://www.microsoft.com/surface/en/us/default.aspx

“Or is it because of patent disputes with Apple?”

Now, that I’d love to see.
Microsoft has a vast array of patents, including touch screen technology./
Here:
The 10 most inventive US companies

The top 10 Rank Company US patents in 2009
1 IBM (IBM, news, msgs) 4,914

2 Microsoft (MSFT, news, msgs) 2,906

3 Intel (INTC, news, msgs) 1,537

4 Hewlett-Packard (HPQ, news, msgs) 1,237

5 General Electric (GE, news, msgs) 979

6 Micron Technology (MU, news, msgs) 966

7 Cisco Systems (CSCO, news, msgs) 913

8 Broadcom (BRCM, news, msgs) 714

9 Honeywell International (HON, news, msgs) 655

10 Texas Instruments (TXN, news, msgs) 652
http://articles.moneycentral.msn.com/Investing/Forbes/the-10-most-inventive-us-companies.aspx

Apple is not even on the list.