10 Top Innovative Companies

NEW YORK ( TheStreet) -- Innovation boils down to two elements: creating something and making people want it. These companies make both look simple.

The American consumer spends his or her year having various products and services thrown their way until they're wading through a stew of other companies' stuff. An innovative business or brand, though, makes enough great products or does enough right to make portions of that stew go down a little smoother and make the entire buying experience worth savoring. These 10 companies did that with flourish this year, some with help from a familiar name, others despite sea-sized obstacles between themselves and the buyer base. All, however, have something to be proud of -- and a lot more to offer -- as the year draws to a close:

1. Microsoft (MSFT)
Credit where credit is due. Microsoft is back in the game.

Yes, we know, Windows Phone 7 manufacturers have only "sold" 1.5 million devices in six weeks -- roughly equal to the number of Android phones activated every seven days. Yes, we know it's been more than a year since the launch of Windows 7 and that there's still no market for the Zune. But anyone remotely associated with the video game industry knows that Microsoft is no longer playing around with its Xbox and Xbox Live stable of products.

First off, after slimming its Xbox 360 hardware and just about eliminating the "red circle of death" failures that cost gamers hundreds of dollars in console investment, Microsoft snagged the console sales lead from Nintendo's Wii and has held it for months. Also, after years of taking a back seat to the Wii's fun little motion controllers and Miis and getting beaten to market by Sony's (SNE) PlayStation Move motion device, Microsoft sold 1 million versions of its $150 controller-free Kinect motion-capture device within 10 days of its Nov. 4 release and 2.5 million before the end of November. By all accounts, that should have been a tough sell, considering the console itself goes for as little as $199, but a good concept and great third-party partner products such as Viacom's (VIA) infectious Dance Central remind us what Microsoft is capable of when its back is to the wall.

Adding ESPN to Xbox Live and putting it all on Windows 7 Phones may be for naught if nobody buys the handsets, but it may have been enough to engage Sony, whose rumored PlayStation phone has appeared in photos on gamer blogs as a tease to a potential Consumer Electronics Show debut in January. Way to change the game, Microsoft.

1 of 10