Microsoft isn’t showing its best colors recently. Their sales fell 17%, profits fell 29%, and the stock plummeted by 8% on the news. Compare with Apple, whose sales were strong in another record-breaking quarter which beat market expectations.

One reason is lack of innovation. Microsoft has been making a big deal of its upcoming stores, but most of what they’re doing only plays up how they are losing to Apple. The very fact that they are opening stores at all shows that they recognize Apple’s success in that area, so they are copying the move. The stores will include an “Answers” or “Guru” Bar, copying Apple’s Genius Bar. The only thing they are not copying–or cannot–is a successful style. Where Apple understands the benefit of muted simplicity and elegance, Microsoft is aiming for flashy, gaudy lack of taste, pasting their logo on every available surface. Speaking of “Surface,” they’re loading that “Big Ass Table™” into the store, along with other stuff which is not actually for sale or else is not affordable to the consumer. Apple doesn’t do that–everything you see is for sale, no items are there for flash only, nothing that costs $10,000 like the Surface.

In essence, Apple innovates, usually getting the details right; Microsoft copies, usually getting the details wrong.

Look at the next rumored Apple product, the iTouch Tablet (or Macbook Touch, or whatever it might be named): already people are talking about how it will revolutionize digital media. This is how the iPhone was also developed:

The 10-inch, 3G-enabled tablet, akin to a jumbo iPod touch, is the latest brainchild of chief executive Steve Jobs. That distinction, as insiders will tell you, carries its share of baggage. Under the critical eye of Jobs, contours must be precise, each pixel of the interface has to match a particular vision, and there can be no fault — no matter how slight — or it’s back to the drawing board.

As such, AppleInsider has observed silently as the project was reset at least a half-dozen times over the past 24 months. Each time, development was frozen and key aspects of the device rethought, retooled and repositioned. At times, those close to the Apple co-founder had their doubts that it would ever see the light of day, just like a smaller PDA device he canned a few years after returning to the company.

Microsoft is proud of its Big Ass Table™, as if it were exactly what the public is clamoring for. While it has some cool features, it is completely impractical. Like the Zune, Microsoft was just shoving stuff out there without understanding what is in fact useful, well-designed, or desired. Neither Surface nor the Zune would ever have passed Apple’s standards. Not that everything Apple puts out is perfect; my last post about the Mail app makes this clear. But most of the time, Apple’s standards and sense is spot-on.

As has been pointed out, Apple doesn’t make junk because others are making some money off of it; if it did, they’d be selling cheap netbooks like everyone else, to the dissatisfaction of too many customers. Apple is the kind of company that makes devices its creators want to use, as opposed to most companies which just try to react to what the market seems to be calling for. That means Apple will make stuff that satisfies their own high standards, whereas other companies all too often just make crap which satisfies a shopping list defined by focus groups.

Microsoft falls into the group opposite from Apple: being the type of company that reacts, they don’t innovate, they copy.

Plus, they embarrass themselves all the time. A few weeks ago, Microsoft’s COO Kevin Turner made a huge deal out of the fact that Apple’s lawyers called him and told him that Microsoft would have to pull or else change their ads. The ads hit Apple on pricing, but were made before Apple dropped prices. One commercial still airing showed a Macbook Pro priced at $2000, when the current price was $1700; Microsoft’s ad claimed a price no longer true.

Turner apparently thought the demand was hilarious:

And you know why I know [the ads] working? Because two weeks ago we got a call from the Apple legal department saying, hey — this is a true story — saying, “Hey, you need to stop running those ads, we lowered our prices.” They took like $100 off or something. It was the greatest single phone call in the history that I’ve ever taken in business. (Applause.)

I did cartwheels down the hallway. At first I said, “Is this a joke? Who are you?” Not understanding what an opportunity. And so we’re just going to keep running them and running them and running them.

Of course, Turner now looks like a complete idiot because Apple’s call was completely legit–Microsoft’s ads, as they stand, constitute false advertising–something that MS apparently now agrees with, because they quietly changed the ads in exactly the manner Apple demanded.

All in all, Microsoft is not impressing the hell out of anyone recently.