Lately it seems to be happening elsewhere entirely, at least on hardware front. See for example Huawei's foldable. Google and Microsoft will gladly solve their software problems, what they are mainly missing is their own distribution channels overseas. I think it we are now caught up to Japan in ~1970s, soon it will probably be time of dominance like ~1980s.

Who said that they were necessarily creating great products elsewhere? I only argued that they were likely going elsewhere. What happens when they get there is a function of management/environment/etc. Most companies don't offer a sense of mission or mystique to their people, but strangely many are willing to settle for stacks of money instead.