Quite the opposite IMO. They grab the market with something crappy that kind of works, kill the competition with questionable (at least) practice, and then they start improving things. Android was early, here. They released an early version that kind of sucked and kind of worked, and took over 5% of the market, then they improved (android 2.2) it and jumped to 25% market share or something in six months.
The netbook market is another example. Linux was there first, when asus sold millions of linux devices (the early eeepc, that I bought). MS reacted by first giving away XP Licenses to the early adopters, and quickly bullying the hardware manufacturers:
http://www.groklaw.net/articlebasic....90619161307529
The difference between the netbook and phone markets, is that here the contender are heavy weight software companies (as opposed to Xandros in the early eeepc). They can't simply be pushed around.
And what was this bit about MS hiring the best engineers? Some of the best minds in the industry are quite entrepreneurial. That's why Google got ahead so quickly: they got a lot of these gems early, and nurtured them in an environment more reminiscent of the bazaar than the cathedral. This was covered in the media in Jan/Feb this year, see here:
http://www.bnet.com/blog/high-tech/w...-facebook/1335
And this is actually one of the alleged reasons for management shakeup at the top in Google a couple weeks ago.
Most people I know have hated their windows computers for the last 15 years. Endured vuruses , crapware, and malware of all kinds. They are still Windows users.
Ironically, many Free Software advocates still embrace the "Don't release until it's ready" paradigm. Clearly, "Release early, release often" works a lot better on the field ;)