It's not about whether or not Microsoft is going to "innovate everywhere" and fail (I don't think they are that stupid as to overdiversify and one can argue that Apple is trying to play everywhere too) but rather if they can out innovate period.
Microsoft's problem is it's self-destructive culture. Like other companies, say Dell, their internal policies around employee evaluations, politics and programs that drive creativity are completely lacking or are totally destructive.
Microsoft needs to adopt a "Google like" culture that rewards innovation "outside of the chain of command". Any reward program that is drives management rewards up the chain at the expense of the actual author is doomed to fail. This is the heart of Microsoft's problem. It doesn't pay to innovate as what's more important is how you make your boss look and your bosses advancement, and so on.