Comment by toyg

With the right strategy, making money is not essential. Like Google with the Nexus a few years ago, MS needs only to build reference hardware to keep OEMs on the straight and narrow, then collect elsewhere (with preinstalled services or OS that OEMs end up distributing).

The problem is that "elsewhere" is currently occupied by Google (in terms of ubiquity) and Apple (in terms of profit), so MS has been pushed into the uncomfortable role of luxury OEM, and there is no major money there regardless of whether you make phones or laptops.