The Race For Perfect: Inside the Quest to Design the Ultimate Portable Computer by Steve Hamm is really a great read.
What struck me was the emphasis placed on design.
So how is a company like Lenovo to differentiate itself from its rivals?
Its answer is design and engineering excellence. When Lenovo bought the IBM PC division, it inherited two valuable assets, the ThinkPad design tradition and an engineering group in Yamato, Japan, that is arguably the best team of computer engineers in the world. The company’s goal is to outengineer and outdesign the competition — producing machines that will command a premium because of their durability, reliability, rich set of features, and good looks.
Boldfaced emphasis added by me.
And after the success of completing the ThinkPad X300:
As word spread throughout the company that design and engineering would be of paramount importance, morale among engineers and designers soared.
Boldfaced emphasis added by me.
And yet, when I consider something Lenovo released, it makes me ask: Hey, Lenovo! What went wrong?
That recent product is the Lenovo IdeaPad S10-3t, a convertible tablet netbook.
I’ve fondled that thing. It’s an outright design abomination in every aspect. I don’t think I’ve ever handled something that was so ineptly composed. It makes the boxy and dull tablet convertible from Asus look good — and that’s a design brimming with Suck too!
What is it that’s hobbling Lenovo and all other hardware manufacturers?
The answer is right there in the book:
Moggridge’s journey alongside Ellenby launched him into a whole new way of thinking about computer design. He recalls that when he got his hands on an early working model of the Compass, he was proud of what he had done. Later, though, he took it home and played around with it, he realized that much of the experience of using a personal computer related to the software rather than the hardware design. He’d had nothing to do with that. Sitting in his house in Palo Alto, he had a revelation. “I was sucked down into the world of software,” he recalls. “I realized that if I was going to be serious about designing for people, I’d have to master software interactions, too.” Later, after Moggridge cofounded IDEO with the noted designer David Kelley, they made software an important part of their practice. In 2007, Moggridge published a book, Designing Interactions, which traces the development of user interface software design to a position of prominence in computers, mobile phones, and Web sites. So, Moggridge had learned what Kay seemed to understand from the beginning: that software would become just as important as the hardware as portable computers evolved and improved. That insight would shape many of the innovations to come.
Boldfaced emphasis added by me.
Every single manufacturer out there with a license from Microsoft is being hobbled by Microsoft.
Let me repeat a picture I ran earlier:
Just consider how few buttons the iPad requires. And consider the software user experience in contrast to that!
Asus and Lenovo — and all others — will never make a credible tablet as long as they keep trying to make Windows do what it was never designed to do.
Your hardware will always be deformed because it has to adapt to deformed software.
Will any of you ever learn that?
Mike Cane's iPad Test 
It seems HTC has a Sense of that (silly pun intended). Not that the Sense UI is great but they know they need to provide a better UI in software, though I think HTC sees it primarily as a point of differentiation from other handsets (and eventually, tablets).