Microsoft Says Tablets Top of Mind Amid Apple Success
July 29, 2010, 8:05 PM EDTBy Dina Bass
(Adds more Ballmer comments starting in seventh paragraph.)
July 29 (Bloomberg) -- Microsoft Corp. Chief Executive Officer Steve Ballmer said tablet computers are high on his priority list as Apple Inc. takes the lead in a market his company has tried to foster for more than a decade.
“Today, one of the top issues on my mind is ‘hey there’s a category we have had Windows on for a long time and Apple’s done an interesting job of putting together a synthesis and putting a product out,’” Ballmer said today at Microsoft’s annual analyst meeting at the company’s headquarters in Redmond, Washington.
Tablets based on Microsoft’s Windows operating system have struggled since their initial release in 2002. Apple, based in Cupertino, California, sold 3.27 million iPads last quarter, outselling all comparable computers. The device debuted April 3.
“We’re coming. We’re coming full guns,” Ballmer said.
Ballmer said the company is working with hardware partners to produce compelling tablet computers and will be aided by the release early next year of a new Intel Corp. chip, code-named Oak Trail.
Oak Trail is a dual-core version of Intel’s Atom chip for tablets. It will improve battery life by using half the power while offering enough processing to provide smooth video and fast Web surfing.
‘Foreseeable Future’
Microsoft signed an expanded licensing agreement last week with ARM Holdings Plc, whose chip designs are used in Apple’s iPad. While the new accord could allow Microsoft to expand the use of ARM chips in Windows 7-based tablets, Ballmer said the machines would be based on Intel architecture for the “foreseeable future.”
Over the longer-term, Ballmer said Microsoft would “embrace what we need to over time in terms of hardware.”
Microsoft rose 8 cents to $26.03 at 4 p.m. New York time on the Nasdaq Stock Market. The shares have declined 15 percent this year.
Ballmer said he was less worried about competition in tablets from Google Inc.’s Android and Chrome operating systems.
“Bring it, we relish the competition,” he said of Google’s efforts in tablet operating systems. “If we can’t compete with whatever the weird collection of Android machines is going to look like, shame on us.”
Ballmer also commented on Microsoft’s mobile operating system, Windows Phone 7, which is due on phones later this year. Asked what he would do if the program is another Vista, a reference to the poorly received version of Windows, Ballmer replied “it won’t be.”
Separately, Chief Financial Officer Peter Klein said Microsoft’s board will address the subjects of dividends and share buybacks at its fall board meeting, as it typically does.
Bloomberg data suggests Microsoft may announce an increase in its quarterly dividend in September to 15 cents a share from 13 cents.
--Editors: Lisa Wolfson, Stephen West
To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
