I'd go so far as to argue that it really wasn't the same market - the one that Windows Mobile was in was not anything like the smartphone market created by Apple and Google.
Tablets, you can make a case for, as above, I guess, but again, the leap with the iPad was so great that it wasn't just an iteration but a leap, leaving it open for a fast follower to come on (as Google did there too).
The difference I was trying to point out was that Apple and Google had no legacy involvement in the market at all. Microsoft had clearly defined strategies that were playing out, and were working on developments to further those strategies.
Apple and Google didn't have Windows Mobile 6, 7, and 8 being planned and developed when iOS or Android were released. Microsoft did. It's slower to turn a ship around than it is to start one going in the right direction in the first place.
And besides faster processors and a slicker UI, what exactly puts Android in a different market than Windows Mobile? Serious question. Both allow you to develop, download, and install apps. Both are pocket computers with a cell phone built in, built on the same paradigm that Microsoft ushered in throughout the 90's (give users almost complete control, let OEMs do whatever they want on the hardware side). Windows Mobile has touchscreen support. Both can/could be gotten for very cheap or very expensive. Android seems to be, for all intents and purposes, a straight-line evolution of Windows Mobile with a Linux kernel (yet still closed-source where it really counts).
Android and iOS are effectively in a different market than the original Windows Mobile because they were designed from the ground up to be used only with fingers on capacitive multi-touch screens. Same thing with the tablets. Windows was designed to be used with mouse and keyboard, which is why it never really worked on tablets. Windows Mobile seemed more like an attempt to make a phone as much like a Windows PC as possible, rather than a genuine rethink of how people would interact with mobile devices. Windows Phone seems much better, but it looks to be too late to get a foothold in the market, even with Microsoft throwing money at it.
What puts them in a different market now? Nothing.
What supports my claim that the market was created by Apple and Google? You cannot exclude "faster processors and a slicker UI", as you put it - nor what they're a part of. It was a revolutionary change in user experience.
Your point about neither Google or Apple having involvement in the industry is a good one and it's not completely uncommon for stories of disruptive innovation - which this clearly is...
I didn't say they were executing on that strategy well these days. Surface, Zune and Bing are all examples of fast-follower products that either came too late to be relevant (Zune) or that weren't good enough relative to the competition to displace them (Surface, Bing).
Which is not to say they can't execute a fast-follower play successfully anymore -- see XBox and Azure. Just that they don't nail it as thoroughly and consistently as they used to.