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Your point on Microsoft informally sanctioning pirating is right on point. The allowed widespread pirating of DOS, as well as Windows 1,2, ans 3, and did not make any real attempt to stem the flow until after Windows 3.1. Windows (1.0 or 2) was nowhere near the best GUI overlay nor was the DOS/Windows combo the best OS solution. Geoworks was miles ahead in functionality, usability and tech specs. The result was MSFTs strategy was clear though, widespread adoption, and vendor lock in. The same can be true of Android, we shall see.
Android is actually one of the better OSs, unlike Windows which had to scale up.