Steve Ballmer: 3GSM World Congress Keynote

STEVE BALLMER: Thanks, Andy, and thanks to all of you. It is a great honor and privilege for me to have this opportunity to be here with you today.

I’m a newbie at this show. This is the first year that I have been able to make it, and I’ve got to say I couldn’t be more excited to be here. It is a real honor and privilege to have a chance to speak, and frankly, I’ve got a lot of excitement and enthusiasm for what we’re doing and what’s going on more broadly in the mobile industry.

Now, today is Valentine’s Day, a day of love and affection, and I’m a guy who at least some of you probably have seen dancing around on the Internet yelling about how I love Microsoft.

So my theme on this day of love is I love the mobile industry, and I love our operator partners, and I want to have that message precede all we’re about to show and talk about here today, because it is very exciting, I think we’ve got some exciting things to talk about and show, and hopefully some thoughts to spark.

I really think that we’re at a point in time today that the devices that one can put in one’s pocket are really like mini PCs. The 3G networks that people have been working to deploy are like broadband networks. And our joint customers will really expect the same flexibility and choice of activities that they get on the PC today.

And it’s really the operators who embrace that, it’s the operators who work hard not only to have a good customer proposition, but to also have a good business value proposition for its shareholders that are really going to thrive and change the world as we move to the future. Because I think it is an interesting point in time: powerful devices meet powerful networks in small form factors. And that’s the opportunity I think in front of all of us at this stage in time.

I want to go back for a little bit in some senses, at least in our perspective, almost to the founding of Microsoft. When Bill Gates and Paul Allen started our company over 30 years ago today, they had a very simple kind of model in their head: the microprocessor represented a form of almost free intelligence, and if only armed it with the right software, it would be able to transform the way people work and live.

Today, the instantiation that we like to talk about is people living the digital lifestyle and the digital work style, people turning to electronic devices on their desk, in their family rooms, and in their pockets, as a fundamental source of entertainment, productivity, information in their daily lives.

If you go back five, six, seven years ago, in some sense we didn’t have the elements for this transformation, wholesale transformation to the digital lifestyle to take place. We weren’t digitizing the world’s information, music, media, news, information; it was just starting to really get digitized as Web sites exploded. The infrastructure, as I talked about in the 3G case, or we think about Wi-Fi networks, home networks, was just starting to come about. PCs were getting easier and easier to use, but the PC world and the world of the mobile device were very separate.

And over the last several years, not only has all of that infrastructure really come into play and organized itself, but perhaps more importantly our customers now all really have it in their heads that they want to lead digital lifestyles and digital work styles, which was simply not the case if you go back five or six years ago.

People will talk about properly that there’s still a digital divide, or people who participate and do not participate in the digital lifestyle. But I don’t care where you are in the world, and I don’t care where somebody is in their phase of life, from a child up to a person in their 80s, I think now people accept the computer, the PC, the phone; they will be the fundamental sources of information, and they expect us and they expect everybody in this audience, and then expect content providers and businesses to be able to serve them entirely electronically.

From a Microsoft perspective, we think we’ve got a lot of the right elements in place to really make that happen. The PC has been a powerful transforming force. We’ve spent the last 10 or 15 years really building out business infrastructure with products like our Exchange e-mail system, our Live Communication Server instant messaging system and others. We’ve worked over the last five or six years to really build out the Internet services in the cloud, products like Hotmail and MSN Instant Messenger, and our Windows Live search.

But it’s really the mobile device in some senses that completes this picture, and brings together an end-to-end offering that we can partner with mobile operators to really enable the digital lifestyle and digital work style for our customers.

The infrastructure is there, as I said: 200 million Hotmail users around the world, 400 million users of Microsoft Office and Outlook, 200 million users of our MSN Instant Messenger software around the world, 300 million downloads of our Windows Media technology. But it’s really the mobile device that we’ve been working to get momentum with the mobile operator community and the customers.

In 2002, just three years ago, we had one device offered by one operator in one country; an inauspicious start perhaps. We sit here just over three years later, we are in market with over 102 operators, there are over 100 different models of Windows Mobile phones in the marketplace today, which is really fantastic. Those devices are available in 55 countries and come from over 47 different hardware manufacturers.

We’ve had over 18,000 applications developed for the Windows Mobile platform. We have over 13 million developers who have gone and gotten the development tools to build Windows Mobile applications.

This year, we’re really ramping up our energy. You’ll see us launch a new advertising campaign all behind Windows Mobile. You’ll see us turn to our 250,000 business partners around the globe and get them ginned up to really move forward with Windows Mobile based solutions, which is an important step forward. We’re launching a new version of Outlook and a new version of Exchange later this year.

And one of the top, top, top priorities of our sales force around the globe is not only going to be to sell the new version of Windows and the new version of Office and Outlook and Exchange, but it will really be to drive Windows Mobile penetration into the business market to allow things to develop and flourish.

So it’s taken a while, we’ve come a long way, the infrastructure is there, and now we have the devices.

I think many people, including people in this audience, may not really understand how far Windows Mobile devices have come. A few years ago, I’d go talk to customers and they’d say, “Where’s your solution to compete with Blackberry,” and I’d show them a device, and they’d say, “Oh, that’s not quite the perfect device for me.” And so it really got me personally and our teams very enthusiastic about making sure that we were spurring innovation among hardware makers to show this wide range of hardware.

And so to share with you a little bit where that hardware fits today and what it looks like, I’d like to invite up on stage with me Suzan DelBene. She runs marketing for our Windows Mobile group, and she’s going to take the opportunity to show you some of the latest and greatest Windows Mobile devices. Suzan. (Applause.)

SUZAN DELBENE: Thanks, Steve. Come on over here. Thank you.

You know, on Valentine’s Day we also want to show our love for our device maker partners who have done an incredible job. We have over a hundred Windows Mobile devices shipping worldwide today, and many of them are here, and we also want to show you some of the devices that have been announced at this show that are just coming out.

First, I’m going to show you the HP iPaq 6900. This is a quad-band Pocket PC phone, so it’s got a touch screen with PDA functionality. It also has integrated Wi-Fi and it has integrated GPS for navigation, and obviously a full keyboard. This is shipping with direct push technology, so it will hook right up with Exchange and allow you to do e-mail directly from your Exchange Server. That one is an exciting one just coming out.

We also have the Samsung i320. This one is also a full keyboard device, very small and compact, just announced yesterday by Samsung, and so another great way to do e-mail while you’re traveling.

STEVE BALLMER: Pretty thin. (Laughter.) Oh, sorry.

SUZAN DELBENE: I’ll never get any of these back.

ASUSTek has made this new 3G smartphone. It’s going to be shipping primarily in Asia. It’s the P305 from ASUS, and they did a great job of having a great compact form for a 3G device, another one that will fit right in your pocket.

STEVE BALLMER: Super. (Laughter.)

SUZAN DELBENE: You’ve got enough pockets for all of them.

And then finally, the i-mate Smart Flip. This is a device that actually was called the Star Trek was its codename. It’s made by HTC in Taiwan. And this device is also shipping with direct push technology, as are all of these, and it’s an incredibly great form factor as well, QVGA screen, quadband device.

So there you go, which one? Maybe one of each?

STEVE BALLMER: Well, yeah, I’d take one of each absolutely. And, of course, they join this wide variety of form factors that are already in the marketplace today. And literally exciting I think for us, for operators and for the device makers is to see the innovation, people moving aggressively to 3G, people integrating the new media technologies, people experimenting with keyboard, non-keyboard, big screens, little screens, pullout keyboards, stylus. I mean, the range of innovation is really quite dramatic.

SUZAN DELBENE: And all these devices running Windows Mobile so you can run rich line of business applications, games, applications that are made by our ISVs around the world, and we have over 18,000 applications today running on these devices.

STEVE BALLMER: Super.

SUZAN DELBENE: Thanks.

STEVE BALLMER: Thanks, Suzan. (Applause.)

The point Suzan made at the end I think is a very important one. One of the key properties of Windows Mobile, which might seem funny in a certain sense, is the key property of Windows itself. It is a consistent platform, which means it runs a consistent set of applications and it has support for a consistent set of peripherals. And I think that’s a very important thing as the mobile industry marches forward, and wants to unlock all of the innovation that’s in all of these entrepreneur’s heads. The cost and complexity of reengineering software for each and every handset, for each and every operator gets to be prohibitive, and to have a platform like this that can be customized by the operator but at the same time delivers consistent functionality to the application developer I think is a real step forward.

If you take that as kind of the base and the building block, I want to first talk about what we, Microsoft, are trying to do comprehensively end-to-end across all of our product lines, and then I’m going to talk a little bit about how open that product line is to substitution with third party products.

We really are trying to build devices, PCs, and mobile devices that connect to servers and services that are instanced out on the Internet that we run, and deliver superior customer experience; absolutely thinking about it end-to-end.

Operators are constantly pushing me, “Tell me what you’re going to do in the PC to better support 3G,” “How do we get 3G into notebook computers and tablets as standard functionality.”

So it’s not just a question of what we’re doing in Windows Mobile, it’s what we’re doing in Windows, what we’re doing in Windows Mobile, what we’re doing in Windows Server, what we’re doing in our enterprise infrastructure — e-mail, application management and distribution, how does that evolve for the mobile world, how do MSN and Windows Live evolve for the mobile world.

And so in all three dimensions — device, server and service — we’re trying to provide a comprehensive end-to-end experience.

But there’s another important dimension also where we’re trying to be fairly comprehensive and end-to-end, and that’s with the customer themselves. Everybody I talk to likes to distinguish carefully between the so-called business customer and the consumer. I actually don’t know myself really what the difference is many times. I agree there are some people who are pure consumers, and I agree there are some people who are purely businesspeople, but most people at least I interact with view themselves as people, and they have a personal life and they have a professional life. And particularly for the device that goes in their pocket, they want that device to be able to give them one glimpse of their information, whether it happens to be part of their private life or it happens to be part of their professional life.

I need to check something for a presentation I’m going to give, pull it out of your pocket and take a look at it. I want to check what the weather is going to be like in Barcelona, did I bring my, I don’t know, swimming suit, which obviously wouldn’t have been a good idea this time of year, I should be able to check it from that same device. I get personal e-mail and I get business e-mail; I want to be able to bring those together on one device. I’ve got one set of contacts; I don’t really want to manage two sets of contacts, I have one set of contacts for my life. Yes, I have an address book that I see from my company, but I also have contacts and people that I contact with instant messaging, I want to see their presence, what they’re up to, one view of my world.

I want to be able to write rules. This is my favorite rule, particularly on Valentine’s Day. If the following 20 people are trying to call me, send it immediately to voicemail. If my secretary is trying to call me, find me wherever I am, as long as it’s between the following hours. And, of course, if my wife is trying to call me, put her through immediately no matter where I am, at my phone, at my PC — heck, even at my set-top box on my TV watching the latest football game; I need her to reach me at all costs.

Now, I want to be able to write that set of rules — we can all get a chuckle, but it is Valentine’s Day — I want to be able to express my preferences for who can contact me when, and I want software to take care of that. And I want the same software to take care of it whether I’m at work or I’m at home or I’m on the go, whether I’m on my mobile phone or I’m on my office phone.

And so we really want a consistent software experience that sits behind these devices and bridges the personal and professional world. That will only happen if at least one company like ours, and maybe some others, too, put in place an end-to-end vision and software that enables it, and then really works with mobile operators to make it come true. It requires incredible cooperation and coordination between mobile operators, enterprises, and the technology providers to bring it to life.

Now, some of you will say, yes, but we also have businesses that have non-Microsoft servers, and some of you are interested in services that don’t come from Microsoft, and some of you will say, “We sell many, many more handsets that don’t have your software than do,” and I’ll say wait a few minutes, we hope you change that; and I want to come back and talk about that heterogeneity and what we’ve done for interoperability.

But before I do that, I really want to show you how we think we can help stitch together somebody’s life end-to-end with software and devices, servers and services.

And so in order to do that, I’d like to invite on stage with me, Dave Karle. Dave is a product manager at Microsoft, and is going to take an opportunity to show you some of these great technologies. He’s going to show you not only things which are currently shipping, but also a set of products that we’re unveiling showing really for the first time here today.

Today, we are unveiling for the first time the mobile version of our Office Communicator software. Communicator is the newest part of our Office product line. We’ve already sold over ten million units. Communicator brings presence and instant messaging and voice capability to the Microsoft Outlook and Office experience at work, and we want to show you how that might work. It provides mobile, secure IM and presence; and it does have, particularly with the release we’ll make later this year, integrated telephony.

We want to show you our new Windows Live Internet services delivered on mobile devices. We’re going to show you Live searching and Live e-mail, and some new things that we’ve done to really make the local search experience really a very, very powerful one, including the integration with mapping, all on the mobile device.

And last but not least, we’ll show you something that we’re going to ship, and we’re showing for the first time from Windows Vista that we call the Mobile Device Center that helps you synchronize information across a set of mobile devices, personal media devices, Windows Media Center Portable devices, and PCs.

So, Dave is going to show you all of these new technologies, along with a set of things that are shipping today in what I hope you agree is a very compelling experience across home life and business life. Please take it away, Dave.

DAVE KARLE: Thanks very much, Steve. (Applause.)

Good afternoon. My name is Dave Karle, and I’m a program manager in Microsoft Windows Mobile and Embedded division. And I’ll be giving you a preview of some innovations that Microsoft has coming out over the next 24 months.

Now, Steve, those previews are going to fall into three categories: communication services, Windows Mobile platform innovations; and last, entertainment services.

Now, the first thing I’m going to show you — and are you ready to go?

STEVE BALLMER: I’m ready.

DAVE KARLE: All right!

The first thing I’m going to show you is Office Communicator for mobile.

STEVE BALLMER: A small show of hands while Dave is focusing: How many people here have ever used our Communicator software in Office? We only have about ten million units deployed — thank you, all the Microsoft guys and five others. (Laughter.) Great to see you here today. This will be really one of the showcase attractions of the new version of Office that we make available later this year, really well integrated with Outlook.

DAVE KARLE: Now, if I could bring your attention to the left screen, you see my device up on the left screen. That’s actually running the mobile client. On the right hand screen I’ve got my boss Paul in another location, and he’s on his PC.

And what I’m going to show you first —

STEVE BALLMER: So this is — a lot of people don’t use this — Live Communication Server brings instant messaging into the corporation, just as Exchange brings e-mail in, and the corporation can run its own presence tied to its own directory and secure in the sense that it can protect who gets what rights to presence information inside and outside the company.

DAVE KARLE: Exactly. And if you look at the screen up here, you’ll see my boss, Paul, he’s online right now. And it’s really cool to be able to know somebody’s presence, because, quite frankly, people waste a lot of time trying to track down their coworkers.

And also you get to control your own presence. As Steve was describing earlier, because you’re going to want to make yourself available at certain times, you’re going to want to be able to come offline. My presence right now, if I go in and look at my status, you’ll see that I want to appear offline. Now, I’m going to change that to online, and my boss, Paul, is going to get a little message saying that I’ve come online, and he’ll go ahead and get a hold of me when he sees me come online.

Now, while we’re waiting for Paul to do that, I’m going to open up a contact card for Steve on this screen up here. Now, I want you to look at this contact card. There are some very important things about this contact card. The first is it’s multimodal; in other words, it brings all the communication methods from this device together. Look what I could do: I can send this message, I can call work, I can call mobile, I can call his computer. In the case of calling his compute — oops, hold on, we’ve got an incoming call.

Hey, Paul.

PAUL: Hey, Dave, how are you doing? How’s it going out there?

DAVE KARLE: Good, good. You want to say hi to Steve?

PAUL: Yeah. Hi, Steve. How’s it going?

STEVE BALLMER: I’m great, Paul, as long as the demo works. (Laughter.)

DAVE KARLE: All right, Paul, we’ll talk to you later.

PAUL: Bye.

DAVE KARLE: Now, let me go back to the contact card before I finish this up.

STEVE BALLMER: Now, that call, how was that call transmitted?

DAVE KARLE: That was a VoIP call.

STEVE BALLMER: That was a VoIP call transmitted using the voice capabilities in our instant messaging software, along with the client software in Office Communicator for Windows Mobile.

DAVE KARLE: Very cool.

Now, if we take a look up-here, you’ll notice that Steve is offline, he has his out of office message up there, so that when I look at his contact card I get all the information I need to know about Steve to know whether I can contact him or not; a very cool way, gives you a very rich, secure, real time collaboration capability over your mobile data network. And this demo was set on a Qtek 9000, which is actually available today.

Now, Steve, do you want to look at some consumer services?

STEVE BALLMER: I sure would. I’m glad I’m delivering a keynote at the 3GSM World Congress; good presence information.

DAVE KARLE: Now, the next device I’m going to throw up here is a non-Windows Mobile device. This is a Bouygues Telecom device. This is a Samsung S400i, and the reason we’re showing it to you —

STEVE BALLMER: So that’s one of the i-Mode devices?

DAVE KARLE: One of the i-Mode devices, exactly.

We’re showing this to you because it’s running MSN Messenger. And this is a very popular device, they’ve sold over 45,000 devices in the first four months, and they’re also going to be launching Hotmail soon.

So when we talk about services at Microsoft, we don’t just mean Windows Mobile, we mean other platforms as well.

And let’s talk about the future of Windows Live. Now, Windows Live. Windows Live beta is coming out; in fact, it will be available in Europe here in about a week. And the first thing that I’ve got pulled up on Windows Live here is my contact list. And if you look at this contact list, guess what you see: unified contacts. I have Svilar is one of my actual Exchange contacts. Right next to him I’ve got Ted, who is one of my Windows Live contacts. So it’s one-stop shopping for your contacts and your consumer ones.

And also the contacts for Windows Live are actually updated in real time. So if Ted was to update his contact information, it would get pushed in real time down to my phone.

I can also see their presence information. You’ll see Ted is red, which means he’s not available right now. And let’s go ahead and find somebody that’s available. I’ve got Michael down here.

STEVE BALLMER: That contact information is getting pushed from where?

DAVE KARLE: From a Windows Live service down to the phone.

STEVE BALLMER: From a Windows Live service, and we can push, of course, from the Exchange service inside the corporation.

DAVE KARLE: Exactly.

Now, you’ll see that Michael is online right now, because he’s green, and you see that little asterisk down below his online indicator, it’s called the Gleam. It lets us know that he’s updated his space. And so I know that he’s updated his space, I could just go out to his space and see what he’s put up there. Also again, look at hits, multimodal contacts.

STEVE BALLMER: His space is a blog, so he basically can go to his blog where he speaks about himself, and you get the notification of change.

DAVE KARLE: Great. Let’s go ahead and send him an instant message.

Now, with the number of ways to send information from these devices, I could tap it in on the keypad, but what I’m going to do here is actually choose to send a voice clip. You can see I can send a picture or a file as well. So let’s go ahead and send him a voice clip, Steve.

“Hey, how are you doing, Mike?” Do you want to say anything?

STEVE BALLMER: “Mike, the demo had better keep working.” (Laughter.)

DAVE KARLE: Well, Mike is shaking now, so we’ll send that off to him.

And let’s talk about search next. Let me pull up a search page that I’ve downloaded. Now, I am going to be returning home through London, and a friend of mine told me about a pub, and that pub is the Bed Crouch Tavern here. And we’re going to go ahead and pull these search results down and see what mobile search brings us. You’ll see it shows me the address, Steve, it gives me a little map with a location on it, and then a number of choices. And one of the choices is get directions. Let’s go ahead and get directions here. And I’m going from the Ritz Hotel, and you’ll see there are my directions.

Now, you want to know what’s really cool about this? I can also get reverse directions. So once I’m there and I have a couple of pints, okay, I can find my way back home. (Laughter.)

STEVE BALLMER: That’s good, that’s good. The technology is not going to stop you anyway.

DAVE KARLE: No, no. So again, as I said, local search is available as a beta in the U.S. now and in the UK later this week.

Now, the next thing we’re going to start talking about is platform innovation, Windows Mobile platform innovation. Enhancing the platform means a lot. We need to enable operators to quick commercialize devices that are exciting and easy to use. This is evidenced obviously by our large ecosystem that you saw on the table over here.

But what I have here in front of you right now is a little thing called Blue Rendezvous. Now, Blue Rendezvous is a software application that was written by Microsoft Research that does something for us that’s very, very special. Who here has tried to actually pair Bluetooth devices? Have you tried it, Steve? It’s difficult, it’s a pain point. And so what we’ve done is we’ve realized that through the use of some really intelligent software, we can overcome this problem, because the Bluetooth standard is an outstanding way to actually bring data between a couple of devices.

So in the Blue Rendezvous application, all I have to do is hit one or both phones at the same time and choose on one phone to find a partner. Now, the phones are going to find a secure connection that quickly in Bluetooth.

And what’s important about this is it’s a temporary connection, this is not a permanent partnership. Neither phone has access to the other phone’s system files. All you can do are the functions right here. I can trade contact cards if I hit number one, I could send a file if I hit number two, I can send a picture at four, send over one of my IM contacts on five, or give them a specific contact with six.

And what I’m going to choose here is number four, and I’m going to send a picture over. And I took a little picture on the stage right before the demo. And I’m going to select it and it’s going to get sent over.

Now, it’s going to ask if the other phone wants it, and I’m going to say yes, and I want you to see how fast this picture transfers. That’s the power of Bluetooth. If you tried to do that with infrared, it would be significantly slower. A really, really great use of software to help enable interesting hardware scenarios.

Now, my next device is this O2 Atom device. Now, you’ll notice I have a presentation up on this device. Windows Mobile 5 has PowerPoint native to the platform, so you get a PowerPoint presentation. So if I’m an MIW, Steve, and I want to go on a trip —

STEVE BALLMER: An MIW?

DAVE KARLE: A mobile information worker.

STEVE BALLMER: Thank you. (Laughter.)

DAVE KARLE: If I want to go on a trip, and I want to take my device with me and have it be the center of my experience, because it is already, because it’s got all my messaging on it, guess what, I want to be able to show those PowerPoint presentations.

So what I’m going to do here is you’ll see the PowerPoint presentation there, right. Let me take this device, I’m going to go ahead with this, and you’ll see that it’s updating up there. The reason it’s updating is I am currently talking to a Bluetooth projector from this device.

STEVE BALLMER: For this salesman, this is a killer feature.

DAVE KARLE: Outstanding feature.

STEVE BALLMER: The ability to have my PowerPoints on my phone, use it for my notes, and control the screen, that’s a killer bridge in my personal and professional lives.

DAVE KARLE: All right, let’s show you another innovation. Now, we’re continually finding ways to add new functionality. Near Field Communication or NFC enables simple, secure, two-way interaction among devices and objects.

Now, I’m showing Wireless Dynamics NFC solution running on a Windows Mobile Vodafone 9100, which will be available early this summer. And I want you to take a look at this application, real briefly, and the device. You’ll see there’s a little dongle sticking out here, and this is actually what does the Near Field read.

Now, I want you to imagine a scenario, Steve, I want you to imagine you’re out at a mall someplace, and you see a poster and the poster is for Project Gotham Racing 3. So what you’re going to do is you’re going to go out there and see that there’s a Near Field Communication symbol on there, and you’re going to wave your device over it, and it’s going to download some information, and let’s see what it downloads. It downloaded all the information about the game, it downloaded its cost, it gives me the option of buying the game or previewing the game. Well, let’s go ahead and preview the game. So what it will do is it’s going to bring up a trailer of the game that allows me to see the game, okay; decide, hey, is this cool, is this not cool, I don’t want to buy it or I do.

Now, do you have an Xbox at home?

STEVE BALLMER: I do have an Xbox at home.

DAVE KARLE: And you’ve got kids, right?

STEVE BALLMER: And I have kids. And I apologize to those of you who may want an Xbox at home; we’re trying to make many of them now.

DAVE KARLE: So we should probably buy this for them, right?

STEVE BALLMER: Let’s do it.

DAVE KARLE: All right, go ahead and put your card on there, Steve.

Ooh, Steve, you’ve been shopping a little bit too much there.

STEVE BALLMER: So I’m out of credit?

DAVE KARLE: How are you going to take your wife out to dinner?

STEVE BALLMER: That’s going to be a problem, Dave. (Laughter.) How are we going to buy more credit now?

DAVE KARLE: I tell you what, just this one time I’ll buy it for you. (Laughter.)

Now, this opens up all sorts of possibilities for Steve.

STEVE BALLMER: I owe you, Dave.

DAVE KARLE: Now, it’s not just about the platform either. Even as extensible as the Windows Mobile platform is, with high speed data networks that are bringing data at broadband like speeds to the devices, and powerful devices, you were talking about how they have almost PC-like speeds, 300 megahertz processors, 64 megs of Flash RAM, virtually unlimited storage in some cases; what you want to do is you want to be able to bring your personal content or content that’s interesting to you over that high speed connection to the device.

And what I’m going to show you here right now is a prototype that Microsoft is working on of a service. And what this service does is it allows me to bring content that I’ve recorded on my PC over the air through my mobile device. You’ve see I’ve got all my recorded content listed out here, and I’m just going to pick this —

STEVE BALLMER: Let me just say one thing. This year, with our introduction of Windows Vista, you’ll see us really build on the momentum we’ve had with the Media Center Edition version of Windows, which allows for direct recording of TV programs. And so we expect there to be a very large repository that consumers have of their own recorded content, either from the television or content they’ve created themselves, and being able to access this, as Dave will show us in a minute, from the mobile device, we think is very important for the consumer or personal life scenarios.

DAVE KARLE: Great. And I’m going to go ahead and it’s calling back to my home PC, and it’s going to stream to this device in real time this show that I’ve recorded.

STEVE BALLMER: So if I’m sitting here in Barcelona, and I recorded my favorite news program, my favorite sports program on my PC at home, and then I want to view it or check something quickly on my mobile device, that works.

DAVE KARLE: Now, Steve, let’s talk about something that’s about to launch. Let me tell everybody about a revolutionary new service that we’re announcing today called BT Movio. Now, BT Movio is the first digital TV on mobile. Virgin Mobile is going to enable this service, and, Steve, why don’t you introduce our guest?

STEVE BALLMER: Well, while he couldn’t be here with us today, we on this project had a particularly exciting and interesting and certainly passionate partner, Sir Richard Branson of Virgin and Virgin Mobile, and why don’t we get a chance to hear a little bit about his enthusiasm for live television over DAB to the phone, and the work we’re doing with Virgin Mobile. So please roll the video.

(Video segment.)

STEVE BALLMER: I hadn’t seen that video before; now I know why I should have previewed it.

The work we’re doing together with BT, who is the other partner in this thing, and Virgin Mobile I think is very important. People will say where really is the role for live video, live television on the phone, how important, and I think you’ll get varying degrees of opinion, depending upon where people are coming from and what the pricing looks like. I think, though, with appropriate cleverness from the operator community and from the content vendors, there are going to be very compelling scenarios that make live TV on the phone important in many way, shapes and forms, and we’re excited about the partnership with BT and with Virgin Mobile around that.

DAVE KARLE: Now, Steve, this is going to be available summer 2006 in Great Britain. The service is going to be available on this brand new handset, custom made for mobile media. This is the Virgin Mobile Trilogy, created by HTC. It’s the first DAV IP enabled phone, and it’s powered by Windows Mobile, has a large screen, and one button access to the TV. All of this content, of course, plays on Windows Media Player Mobile. Virgin supplies the content, and British Telecom supplies the network.

So if I pull up the application here, you can see the different networks I can actually access right now. And if I click on one of these, again, it’s going to go out, this is going to pull down the live TV off the network and deliver it to this device; a really cool device, the first digital TV on a mobile device.

Now, BT worked closely with Microsoft and the Windows Media team to make this work, and with Windows Mobile on it, it makes the Windows Media experience really shine through.

Now, innovation is our watchword here at Microsoft. Whether it’s our extensible, always evolving Windows Mobile platform, or it’s Microsoft services that are available to any platform, you can count on us to bring innovation to the marketplace.

Thank you very much, Steve.

STEVE BALLMER: Thanks, Dave. (Applause.)

I think you get a sense of the range of innovation on which we’re working, and I do think it’s important to walk through in your mind those scenarios: my personal life, my professional life, my entertainment interests, my information interests, my contact interests; all integrated on place, with the right kind of end user experiences and platforms.

We exercise corporate server software, we exercise services that run out in the Internet cloud, we exercise handsets, we exercise Microsoft handsets and on-Microsoft handsets, services, and applications that came from a wide variety of partners.

We’re trying to get that world to work end-to-end, that’s our mission, and we’re trying to have an entry, as I said earlier, at all levels, but we do recognize and understand that the world is a heterogeneous world and it is very important that our technologies embrace that heterogeneity.

I often get asked, because we are the company I think that is trying to have the most comprehensive product line, I often get asked, “Do we have to take all of your stuff to take any of your stuff?” to which the answer to the question is no. Yes, we’re trying to make Windows Mobile with Windows PCs with Windows Server and with Windows Live services work brilliantly, so I’ll say that upfront. But we provide great extensibility. If you have your own services that you want to build and bring to a Windows Mobile handset, we have a great richness of tools for you to write applications.

If you want to build your own services, you can license servers from us to build out your own services as a mobile operator, and I’ll talk about some work we’re doing with Beijing Mobile in that area in a minute.

If you want to build your own handsets without our operating systems, as many people do, we license our technologies. We’ve licensed Windows Media technologies, as an example. I was participating at a launch last month with Verizon of their new Vcast music service with Windows Media technology in a set of phones that were running a variety of different operating systems.

Some people will choose to build their own business server software or service software. We’ve been active licensing protocols like ActiveSync that let you talk to Outlook and talk to Exchange. We have a range of partnerships we will announce in that arena.

And if people want to host Windows Live experiences on other operating systems in handsets like the Samsung device we showed you from Bouygues and many others, we also support that.

So it is a heterogeneous world. We’re going to try to give you the tools for a great end-to-end wonderful experience, but we’re going to embrace interoperability as a core principle of our partnerships with mobile operators and handset vendors.

We announced yesterday with Motorola that they’ll be licensing our Windows Media technologies to include in their phones, and as they work to offer rich devices with great music and movie and video interactivity, they’ll be able to have access to the world of content that’s available because of the PC in Windows Media Format.

In the server arena we’re announcing with Beijing Mobile a partnership where they have licensed our LCS or Live Communication Server that, as I showed you earlier, can host instant messaging and VoIP and presence inside a corporation, and they’re running that as a hosted service for Beijing Mobile customers, which to us is an incredibly exciting partnership and relationship.

We’ve also licensed, though, our protocols in this arena, our ActiveSync protocols to a number of different handset vendors. We licensed Nokia some months ago, and we’re also announcing today a license of our ActiveSync protocols to Sony Ericsson, so on their handsets without Windows Mobile, they too have access to the world of Outlook and Exchange.

And last but certainly not least, we are working with a variety of partners to put Windows Live client on mobile handsets that don’t come from Microsoft. The Bouygues Telecom example that we showed you was a Windows Live client hosted on i-Mode, and we and our partners are prepared to deliver Windows Live experiences on essentially any handset where we have an operator who thinks there’s volume and business that’s interesting to do; whether it’s for search, whether it’s for e-mail, whether it’s for instant messaging. As we said, we started out with Bouygues in instant messaging, and we’re now delivering a full e-mail and IM experience to that handset.

So while we’re working hard on end-to-end comprehensive mobile scenarios, device to business, device to service, device to personal content in the home, we also think we’ve got a very strong interoperability story that will allow us to work with you in a variety of important and creative ways.

We have learned over the last several years as we’ve really invested in the mobile business how essential it is for us to have the right partnerships with the ecosystem, the people who build the chips, TI, Qualcomm, et cetera; to the people who build phones and devices; but certainly first and foremost the right partnership with mobile operators. I would say I personally probably spend more of my time meeting with telecom executives, mobile and fixed line, than I do any other segment of our important partner and customer constituency, because we see so much of the action in our business and see so much of the growth opportunity in our business building off a very successful embrace of mobility and very successful partnership with mobile operators.

I get asked all the time, “Are you guys friends or are you guys foes?” Take only one message: We come as friends. We see opportunity to change the world together in a positive way.

And I’m excited about that, I’m encouraged by that, I’m encouraged by your presence and attendance here today, and certainly we look forward to bringing innovative technologies to market that we can mobilize together, transform the world, delight customers and hopefully also help both of our shareholders.

We thank you very much, I appreciate your time today. All the very best; enjoy the rest of the show. (Applause.)