Press Conference: Mobile World Congress 2009

Steve Ballmer: Thank you. It is great to be here at Mobile World Congress (MWC) in Barcelona, and particularly to welcome you all to this press conference. This is an extremely interesting time to talk about the mobile industry, given that we are all trying to understand how to respond to the global economic downturn. As I have said before, what we are going through represents more of a fundamental economic reset than a recession, and it will take some time before economies around the world reestablish themselves and we achieve consistent growth once more. No industry is immune to this economic reset, including the computer and mobile industries. As people throughout the world struggle to make every dollar count, they will expect all of us in the mobile industry to offer devices and services that offer increasingly greater value.

No matter what happens in terms of the economic situation, none of that will slow the pace of technological progress. There is no turning back from the kinds of advances that continue to help connect the world and to bridge people and information in a much more tightly knit fashion. Ultimately, the power of ideas and innovation will continue to drive forward, no matter what the state of the economy is. All of our opportunities to use technology to change people’s lives have not diminished in the slightest. Indeed, the need and demand for the kind of innovation that our industry and company have is even more important.

During the last 25 years, the world has seen incredible advances in information and communications technology, from the PC revolution to the rise of the internet and the spread of mobile technologies that have put mobile phones into the hands of half the people on the planet today. Today, mobile phones are more capable than ever before and have more sophisticated software and more powerful hardware. Yet, over the next several years, smartphones will develop and increase to account for more than 50 percent of the mobile phone market, to much higher penetrations and much quicker in some developed countries.

These trends are really changing the role that the mobile phone plays in people’s lives. People do not want a phone for work and a phone for their personal life; they want a single phone that they can use to access all of the information and people in their lives that are important. They want a phone that is connected and integrated with all the other sources and places where they use information. At Microsoft, our vision is to deliver one platform that extends across the PC, the phone, the TV and the web, and that connects us all to the information and people that we really care about. That platform is Windows in various forms, some of which exist today and some of which we still need to bring to market. With Windows, we will drive innovation that brings it all together in one easytouse and affordable experience that can have a significant impact on the lives of billions of people around the world.

With Windows, our unique approach is to galvanise an industry by creating a platform for thirdparty innovation. Windows has extended the power of computing to the largest number of people in the world today. Windows enables an ecosystem of hundreds of thousands of companies to profit, thrive and grow, by adding value around Windows.

Today, we have a very strong Windows mobile ecosystem. Our industry partners include more than 50 companies that make phones, over 160 mobile phone operators, and almost 500,000 software development companies that are writing applications. In the past year, our partners have delivered more than 30 new Windows phones to market, giving users more choice than with any other mobile platform available today. There are already 11 unique phones from our partners that have each sold over a million units, which is phenomenal by any stretch of the imagination.

However, the time has come to do more. We need to take our Windows Mobile business to yet another level. The time has come for us to start bringing the full Windows experience to mobile phones. It starts with a recognition that the phone is more than just an address book with a microphone and a speaker; it is more than a digital camera and a device for texting friends; and it is even more than just e-mail and a calendar. It is your instant connection to all of the people and information that you care about most.

We have to make it a Windows phone that benefits from and picks up the experiences that people expect on bigger-screen devices. A Windows phone has to be your phone, because it is unique to you. Windows phones have to come in a variety of shapes and sizes, so that each individual can pick the hardware that is right for them. Whether you want a touch screen or a keyboard, a big screen or a little screen, or whether design or size matters, we have to ensure, with our partners, that there is a Windows phone that meets your needs. With a Windows phone, you can personalise your experience with the applications that you need to make it distinctively yours. You can instantly and easily customise ringtones, themes and everything else that are you and that stand for you. Windows phones connect to your whole life: the productivity tools that you need at work and the social applications that you need to keep in touch with your friends on Facebook or MySpace or through Instant Messaging.

With Windows phones, you should have a device that really spans your personal and your work life. A Windows phone also has to be more than just the device itself; it has to be an end-to-end experience that connects you to the PC and the internet and that breaks down the barriers between the information, devices and applications that you use every day.

Today, we are introducing the first generation of what we are now calling Windows phones. They run the Windows Mobile Operating System (OS) but we will refer to them simply as Windows phones. We have three big announcements in conjunction with that:

First, we are announcing the Windows Mobile 6.5 OS, which will become available on handsets later this year. Windows Mobile 6.5 delivers a new user experience, with an improved user interface that includes touch and other interaction modalities. It has a new home screen and customizable widgets for speeding access to important applications. We are also improving the browsing experience so that it is more similar to the PC by bringing an updated version of our Internet Explorer software to Windows Mobile 6.5. With Windows Mobile 6.5, we are taking mobile phones to a new level in terms of stitching together the PC, the phone, and the web and bringing them closer together into a more seamless and simpler user experience. It is no longer about how the phone works by itself, but how it works in conjunction with the PC and internet.

Second, we are announcing a new service called Microsoft My Phone, which are services that make it easy to manage personal information on a Windows phone via the web. With My Phone, you can back up and protect all of the information on your phone on the web, so you can access it on the web and restore it quickly and easily to a new mobile device. My Phone streamlines the flow of information between your mobile phone and your PC. It makes it easy to synchronize, edit, and share all of your information.

Third, we are announcing Windows Marketplace for Windows phones. Here, you will find applications to match your needs and make your phones truly unique and personal to you. Today, there are already over 20,000 applications that run with the Windows Mobile OS. We are going to give developers new tools to continue to build increasingly better applications; however, with the Marketplace, they will also have the freedom and the convenience to distribute them and have customers find them easily.

We are going to go into all these of the announcements in more depth and I would now invite Andy Lees to tell you some more about Windows Mobile 6.5 and some of these new services.

Andy Lees: Today is a really exciting day for us, not just because of the individual products and capabilities that we are announcing, but also because it is the beginning of a new strategy: the Windows phone strategy. It is a strategy that goes beyond looking at the individual device, to a set of end-to-end experiences. We are going to move from looking just at devices to devices plus software and services. We are also shifting from a focus on business to business and consumer. We are going to work together to provide Windows phones, Windows Live and Windows on the PC.

Today, we are announcing some exciting products to that end, but you will also to continue to see more announcements as the pieces fall into place over the next 12 to 18 months. We are building on a lot of momentum. We have sold more than 50 million Windows Mobile devices since we started; we sold more than 20 million in the last year alone. We have more than 430 million users of Windows Live, through services like Hotmail and Windows Live, each of those having 300 million users uniquely, building on the installed base of more than 1 billion Windows PC users.

In short, we are enabling you to put your life in your pocket. To make it seamless and to have endto-end experiences, you want to look through your device to use it as your window on the world. Let us look at a short video of some of the capabilities that we are starting to deliver with this announcement.

[Video presentation]

Without further ado, please welcome Prithvi Raj, who is going to take us through a demonstration.

Windows 6.5

Prithvi Raj: I am excited to give you a sneak peek of Windows Mobile 6.5, which is the first generation of our new Windows phones. My Windows phone brings my work and personal lives together, so I can really make it my phone, with my stuff, and really in my own way. Only Windows can bring the best of the PC, the cloud and the phone together for my whole life.

Here I have the lock screen of Windows Mobile 6.5. We have done quite a lot of user research to find out why people pull their phone out of their pocket and what they want to accomplish. It comes down to three quite simple things:

First, they want to know what time it is.

Second, they want to figure out where they are supposed to be going.

Third, they want to know why their phone has been buzzing, ringing or beeping all day long in their pocket.

Now you have all of that information on the lock screen. First, you have the current time and your next calendar appointment. You also have something that we call notifications, which tells me the ways that people have tried to get in touch with me since I last locked my phone. In this case, I have a couple of unread e-mails, a few unread text messages, and even some missed calls. I can slide any of these over and go directly into my e-mail, text messages or missed calls, making it that much easier to respond very quickly to those people who are trying to get in touch with me. In this case, I want to go right into the home screen and walk you through that experience, so I will just drag the lock bar over.

Here, you will see the brand new home screen on Windows 6.5. I really have all the information that matters to me right on the home screen at a glance. I can grab this bar and slide up to see if I have any new voice-mails. In this case, I have a missed all. I can even get to my IE favorites. In this case, I have pinned a few IE favorites to the home screen, including MSN.com, and I can access those with just one touch. This provides much quicker access to those websites that matter most to me. I am going to scroll down, and you can see that I can access my text messages, e-mail and even my calendar. With a few swipes of my finger, I can walk you through my day, just like that.

Andy Lees: This ‘Dana’ seems to be somewhat of a feature here. What is happening there? You told me that you had no social life?

Prithvi Raj: Now that we have announced Windows Mobile 6.5, I feel like my social life is about to change. I just met her last week at a party; I think we really hit it off. I am going to show you a quick picture of her from the home screen. She is one on the left; what do you think?

Andy Lees: I do not want to be the judge in front of everyone here.

Prithvi Raj: We will let the audience judge. I am expecting an e-mail from her. From my home screen, I can go into e-mail and into my Hotmail. It looks like Dana has responded to an invitation that I sent her last week. As I open this up, ‘Prithvi, it was great meeting you the other night. I checked my calendar and I can make the ski trip next week.’ That is great news.

Andy Lees: You have just met her and you have invited her on a ski trip.

Prithvi Raj: I told you it was a really deep connection. It felt like a movie. With just a swipe of my finger, I can go between messages. It is like flipping pages in a book. These e-mails look just like the ones on my PC, which is one of the benefits of Windows. It is the same experience on my Windows phone as it is on my Windows PC. Here I have my personal e-mail and, with a single swipe of my finger, I can go right into my work e-mail – my Outlook e-mail. I have 200 e-mails – ignore that, Andy.

Andy Lees: That is the work/life balance.

Prithvi Raj: I promise I will not call Dana this afternoon. Instead, I will go through some of these e-mails.

With another swipe of my finger, I can go into my text messages. As I open this up, it looks like Marty cannot wait to go on our annual ski trip. They always make fun of me going solo on these trips every year; this year, however, I am going to bring Dana with me. He has also tried calling me. I have all of that information right from that text messaging screen.

With that, let us look at the new start screen on Windows Mobile 6.5. I am going to press the hardware start button to go to the start screen, which gives me access to all the applications that I want to use most. It connects me to the information that I need with just a few clicks.

Andy Lees: This is important: all the Windows phones will have the same button on them. We will provide distinct value to the end customer and they will be able to go into any store and see which phones are Windows phones, because they will all have a Windows flag on them. If you press the button, you have access to all the things that you can do on the phone through the start UI.

Prithvi Raj: I can even customize the start screen and reorder the applications, so that those that I use most often are at the top.

In this case, however, I want to go straight into IE. If we load MSN.com, it is the same experience that I have on my Windows PC. That is because it is the same IE browsing engine that provides that capability across both platforms. We have thought a lot about how to view the web on a small screen, so the same set of gestures that you saw in the e-mails are now brought over to the IE browser too. With just a few swipes of my finger, I can get around the webpage very easily and read my information. In this case, however, as I told you, Dana and I are now going out, I think, based on her e-mail. For the ski trip, I want to ensure that we are changing our accommodation – it is not a great first-date idea to have her sleep on the floor – so I am going to go to the Chamonix website, which is where we are staying.

Andy Lees: Because you have the same browser on the PC and on the phone, things like Flash are supported, which a number of sites use for core navigation and functionality. As well as the rendering being very similar to what you are used to, the fact that you have Flash support there too also provides a much higher fidelity. About 40 percent of the time when people go to a website today on a mobile phone, they are confused as to why the experience is different to what they have been used to seeing on their PC.

Prithvi Raj: As you can see, the experience is exactly the same between the Windows phone and the PC. That is with full Flash support etc.

Andy Lees: I heard a beep.

Prithvi Raj: I heard a beep too; it looks like I have an IM. Maybe it is Dana; I am going to check. It turns out that it is not Dana, but Marty: ‘What time are you getting into Chamonix? Last one there buys the first round of drinks.’ One of the things that I really love about IM on my Windows phone is the ability to respond with voice so that I can avoid typing as well as adding a bit of emotion to my IM. I am going to click on a voice clip here: ‘Marty, you had better be ready to buy me my first few rounds. By the way, do you mind if I bring a new friend with me – someone who I just met last week?’ I am going to send that off to Marty, who is IM-ing with me on his Windows PC. Let us see what he says.

Andy Lees: You are IM-ing here from a phone and, because it is a touch phone, you do not want to type it in, and it is coming through on a PC. That is cool.

Prithvi Raj: Marty says, ‘Another new friend? Did we not try this last year?’ They keep making fun of me about this. ‘You had better let Kim know.’ Marty, let me add Kim to the conversation and see what she has to say. Kim tells me that she is always really busy and never wants to be disturbed. I am going to add a participant here; there is Kim, clearly working very hard playing ‘Gears of War’ on her Xbox 360. I am going to add her to this conversation now.

Andy Lees: As you can see, she is playing her Xbox and she has now received an IM. We now have a three-way IM between the PC, the phone and somebody who, a few seconds ago, was killing somebody on an Xbox.

Prithvi Raj: All three screens are now IM-ing and they are all around the world, in this case. Kim, again, wants to see a photo.

Andy Lees: You are IM-ing here from a phone and, because it is a touch phone, you do not want to type it in, and it is coming through on a PC. That is cool.

Prithvi Raj: Marty says, ‘Another new friend? Did we not try this last year?’ They keep making fun of me about this. ‘You had better let Kim know.’ Marty, let me add Kim to the conversation and see what she has to say. Kim tells me that she is always really busy and never wants to be disturbed. I am going to add a participant here; there is Kim, clearly working very hard playing Gears of War on her Xbox 360. I am going to add her to this conversation now.

Andy Lees: As you can see, she is playing her Xbox and she has now received an IM. We now have a three-way IM between the PC, the phone and somebody who, a few seconds ago, was killing somebody on an Xbox.

Prithvi Raj: All three screens are now IM-ing and they are all around the world, in this case. Kim, again, wants to see a photo.

My Phone

Prithvi Raj: I showed you a photo that I have on my Windows phone. One of these things about these phones is that I carry them around for both my work and personal life, so they have lots of really critical information: stuff that I do not want to lose, such as my photos, text messages and some important contacts. Certainly, some customers have Exchange or Live services that back up some of that information, but not everyone does and not all of that information is backed up. If I lost my phone, then, I would hate to lose all of this information. Something like 12 million phones were lost last year in the US alone.

To solve that problem, we can show you the new Microsoft My Phone service. Let me now switch to the PC. With the service, I have about 200Mb of storage to back up all of that important information. In this case, I am going to jump right into photos. As you can see, here is the photo that I showed you, which I want to back up. Before I got on stage, I knew that people were going to want to see a picture of me and Dana, so I did some creative editing and cropped some pictures together, which I will show you. I am going to upload that now from my PC to the My Phone service. What do you think? Will they buy that?

Andy Lees: They will not buy it that you look like you are together.

Prithvi Raj: At least I am good-looking. If I go into contacts now, I want to set that same picture as Dana’s contact card information. If I hit edit here, the picture is now backed up. As I mentioned, my phone is backed up at about midnight every night. In this case, without wanting to make you wait that long, I am going to force the synch on my phone, so you can see the picture and how it shows up on my phone.

Prithvi Raj: In the mean time, let me walk you through some of the capabilities of the My Phone service: I have access to can manage my calendar from my PC or phone – it is always backed up; I can even manage my tasks. Many people perform or set tasks on their PC, all of which is backed up and is up-to-date on the phone, I can even back up my videos, music and documents, such as a grocery list. As I update things, they are updated on the phone.

Prithvi Raj: I also want to jump into text messages. This is one that is quite important to me, because there is a lot of personal information that you want to keep which is stored in your text messages. If your phone is lost, all those text messages are also lost. In many cases, you do not want to have your text messages on your phone. Maybe there are some old messages from ex-girlfriends that you want to keep but not on your phone, so you can do something really neat with the My Phone service.

I am going to search through all of my text messages for those that have the word ‘ski’ in them. I can press ‘archive to web’, which will pull the text messages from my phone and back them up to the My Phone service, so I always have them if I want to go back and look at them, but they are no longer on my phone. It is quite a cool scenario and a good way to keep my information. If I lost my phone and went out and bought a new one, all the data stored on the My Phone service is restored to my new phone.

Andy Lees: That is cool, because, as you said, millions of people lose phones.

Prithvi Raj: I can back up multiple phones with My Phone. From the home screen, I can go straight into my pictures. Here is the picture of the two of us that I synched; I think this is a winner. I can go into the start menu and open up contacts. The neat thing about contacts in Windows Mobile 6.5 is that we have updated it to make it much easier to find the people you are looking for. I tend to look for people’s pictures rather than their names. Let me open up Dana’s details.

Andy Lees: There is the picture of the two of you.

Prithvi Raj: My Phone makes it very easy. I have a new text message from Dana: ‘I am really excited about the ski trip. Can I bring my boyfriend along?’ What is going on?

Andy Lees: Maybe she has a sister. Thank you very much, Prithvi.

Windows Marketplace

Andy Lees: A key part of our strategy is to ensure that not only are we successful with the software and services that we provide, but also that we work effectively, which is a key element of Windows phones strategy. As Steve said, we have over 50 original equipment manufacturers (OEMs), 150 operators and 20,000 applications that are available from independent software vendors (ISVs). We also announced Marketplace today, which is not the thing that makes a developer ecosystem.

However, if you have a vibrant ecosystem that has rich development tools and a rich platform, Marketplace enables you to directly connect some applications to potential customers. We will not limit what a developer does so that they have to use the Marketplace. They can continue to go to websites and load applications, or organisations can load applications on behalf of their employees, but it does provide another option for developers who want a direct connection into their potential customers. We are getting a lot of support from our partners around Windows phone. Let us take a look at some of the companies that are endorsing our Windows phone strategy.

[Video presentation]

Partner Spotlights

As well as going through our partners in totality, I would also like to introduce three partners who are here with us today: HTC, LG and Orange. HTC has been with us from the very beginning of the Windows Mobile partnership, for more than 11 years, and we have had lots of firsts together. It was the first OEM to provide a Pocket PC, the first to provide a smart phone OS, and the first to provide a 3G phone based on Windows Mobile. Today, it is announcing two new devices, so I am particularly excited to welcome Peter Chou, CEO of HTC.

Peter Chou, Chief Executive Officer, HTC: Thanks, Steve and Andy. On behalf of HTC, I am very honored to join you today for this announcement. Twelve years ago, when HTC started and we met with Microsoft early on, it was clear that we shared a very similar vision of what smart mobility and connectivity could offer customers some day, even though it would take a long time. I am probably a veteran of Windows Mobile, of which I am proud. We insisted very much on trying to make all of these visions happen. Today, more than 40 million HTC Windows phones have been sold around the world. It is great that this joint vision is coming true, but we are not done.

The art of designing mobile phones continues to broaden and change as demand for this change grows. In the future, suppliers must have high capability to deliver such cutting-edge mobile innovation, beautiful design and the kind of user experience that is very important. HTC is very committed to making this happen. Of course, we need to ensure that devices are optimised for online services, applications and connectivity.

HTC and Microsoft have been working together as closely as ever, and we look forward to continuing this partnership for many years to come. I would like to congratulate Steve, Andy and the entire Windows Mobile team on the unveiling of Windows Mobile 6.5. I am so excited to see this experience. For the last year, we have been working so closely with Andy on making Windows Mobile 6.5 happen.

HTC is hugely committed to leveraging the flexibility of Windows Mobile 6.5 and to continuing to innovate in order to deliver an even better mobile experience. Earlier, HTC announced two products: HTC Touch Diamond2 and HTC Touch Pro2. These devices introduce a new peoplecentric experience and a new innovation in terms of Push Internet and Straight Talk technology.

I am very happy to announce here that these two devices are Windows Mobile 6.5ready. Those customers who purchase these two devices will be able to upgrade to Windows Mobile 6.5 for free when it is available. Together with Microsoft, we have put in tremendous effort to make this happen and we are very excited. I want to thank Andy for his continued commitment to HTC. Thank you very much and enjoy the show.

Andy Lees: I am also very excited to announce a strategic partnership with LG, which is a very strong player in the mobile industry. It has a strong share, particularly in high-end feature phones, really leading the industry in design and innovation. In this agreement, we both recognise a shift from feature phones to smart phones. In our agreement, LG is shifting its R&D and marketing so that the primary OS that it will use for its smart phone devices will be Windows Mobile. Therefore, as we see this shift over, it will continue to be an incredibly strong partner for us as we invest together. Microsoft is investing R&D and marketing resources to help facilitate the innovation onto the Windows phone. Please welcome Skott Ahn, President and CEO of LG.

Dr. Skott Ahn, President and Chief Executive Officer, LG Mobile Communications: This is the third time today that I met you: twice face-to-face and once during our press conference, to which Steve was invited. As Andy just said, LG and Microsoft signed an agreement a few hours ago. You will see more than 50 LG Windows phone models between now and 2012. The first Windows phone is the LG GM-730, representing the strong partnership between LG and Microsoft. Starting with this model, LG and Microsoft will introduce a wide range of Windows phones across the world in all price ranges. To achieve this, LG and Microsoft will create joint R&D and marketing teams to make the most of our expertise in hardware, software, design and ecosystems.

In our opinion, consumers simply want their smart phone to be intuitive, fast and useful. We aim to provide these qualities on our Windows phones, with stylish design and innovative UI technology. From now one, together with Microsoft, I am sure that we can take the Windows phones market to the next level. I would like to end by congratulating everyone at Microsoft on its launch of Windows 6.5 today. Thank you.

Andy Lees: Finally, I would like to introduce Orange, another early partner in Windows Mobile. It was the first operator to bring the smart phone to market all those years ago. Orange has been innovative in choosing devices that appeal to its target customers, while also in adding software and services to create a unique experience. For our Windows phone strategy, because it is more than the device, it is how the software and the services work together, as well as how we market together: how we can generate the excitement of end-users about what a Windows phone can do, so that, even when you go into an Orange store, you will be able to see Windows phones from a variety of different manufacturers, with unique Orange services in addition to what we are providing. Without further ado, please welcome Yves Maitre, Senior Vice President of Devices at Orange.

Yves Maitre, Senior Vice President of Devices, Orange: Before talking about phones and telecommunications, I want to tell you a secret. The first time I met Steve Ballmer, I was still quite young. It was an important private meeting with the top management of France Telecom. Steve told us in confidence, ‘I love Paris because I can go jogging without being disturbed.’ I learned this afternoon that he also likes skiing in Chamonix. The next time we meet Steve, I wonder what other sport he will tell us about.

I believe that the partnership that we have with Microsoft is one that began many years ago, at the time when Microsoft was building its PC software and France Telecom was moving from a fixed network to internet and mobile networks. One of the key convergence points between France Telecom, Orange and Microsoft was exactly that: convergence. Steve mentioned convergence early on his speech, and I believe that this convergence story is also the one of the convergence between OS, devices and network.

Second, Orange has also entirely redesigned its mobile multimedia strategy. We talk a lot with Andy. Two weeks ago, when I was in Redmond, we were able to ensure that these mobile multimedia match with Mobile 6.5 and next generation. We believe that, with partners like HTC and LG, we are all on a journey of bringing a new experience in terms of mobile multimedia and telecommunications to the entire world. Just as Microsoft brought the internet to everyone, together we will bring the mobile internet to more than six billion. I am very proud to be with the mobile family and I am sure that, together, we can do more. Thank you.

Steve Ballmer: There is certainly no shortage of excitement and enthusiasm that I and Microsoft have about the opportunities to change people’s lives through technology in general and mobile specifically. I do not want anyone to leave here with the smallest sense of confusion: we are very committed to mobile computing and we are bringing the same kind of long-term, persistent and tenacious vision and focus to Windows for phones that we brought to Windows 7, Windows Live and many other Microsoft offerings. Together with our partners, we see tremendous opportunities to innovative, compete and succeed, and we are certainly looking forward to delivering on this promise of a whole new generation of Windows devices which span PCs, phones and TVs and that help bring people closer to the people and information that are important to them. With that, we look forward to answering your questions. Thank you very much.