How do smart people at Microsoft keep making mistakes?

The Zune seems to be having little success at this time. Microsoft, by some estimates, spent $!0 Billion and 5 years to develop Vists, its new operating system. It keeps on losing against Intuit, is about to go up against McAfee and Symantec, is behind Google on innovation, continues to fail with enterprise software. Yet, the company has more smart people than anywhere else. What is happening? It seems that the processes are not in place, and an intellectual snobbery slows down the ability to bring really great products to market.