I disagree. The Surface line, which came out in 2012 and has been continuously refined each year after, are some really beautiful, inventive, and highly technical pieces of hardware. The hinge on the Surface Book especially generated a bit of buzz when it came out, and the rest of their lineup is quite solid.
To say this also ignores the XBox and its controller, which often trades places with the modern PlayStation controllers for what is considered best-in-class.
Microsoft has plenty of hardware design capabilities.