Ballmer’s CES Keynote Touts Everything But Tablets

Microsoft CEO Steve Ballmer used his keynote at the Consumer Electronics Show (CES) to highlight the company’s forays into the consumer realm, including the Kinect hands-free controller for Xbox 360 and Windows Phone 7.

The company’s product line is the result of “big technology bets that we’ve made”, Ballmer said, including “bets on the cloud” and “natural user interface”. Thanks to those innovations, he added, Kinect and the Xbox 360 are expanding from pure gaming platform to household entertainment hub, integrating offerings such as Netflix and Hulu.

“As we speak today, millions of people are enjoying their TV, their music and their movies on demand through Xbox Live,” he said. In coming months, Microsoft will roll out Avatar Kinect, which will allow users to interact with others in virtual environments via gesture.

SoC Armed With Windows

Although Ballmer’s presentation focused primarily on consumer innovations along the lines of smartphones and gaming, Microsoft has already made some significant announcements in the opening hours of CES. Hours before Ballmer’s keynote, the company used a  press conference to announce that the next version of Windows will support System on a Chip (SoC) architecture, in particular ARM-based systems from partners such as Qualcomm, Nvidia and Texas Instruments. ARM chip designs dominate much of the burgeoning mobile market, which Microsoft is anxious to penetrate.

Windows currently dominates the x86 platform used by traditional PCs, but the rise of powerful mobile devices such as smartphones and tablets – powered largely by ARM chip designs – has effectively created a whole new market for the operating system, provided it can work out the engineering details.

“Under the hood there’s a ton of differences that need to be worked through,” Steven Sinofsky, president of Windows and Windows Live Division, told the media and analysts assembled for the press conference. “Windows has proven remarkably flexible at this under-the-hood sort of stuff. We work on storage from Flash all the way up to terabytes of storage” and “Windows kernel on alternate architectures.”

During the keynote, Ballmer delved into the ARM development a little more. “We made the announcement now in order to allow all of our partners to work together and build upon this innovation,” he said. “We’ve very excited about the full set of partners for the next version of Windows.”

He added: “Windows support for SoC is an important step for Microsoft and for the industry.” By emphasising the need for what he termed “the full range of capabilities for any device,” Ballmer seemed to be drawing a contrast between Windows and the lighter operating systems backing mobile devices from Google and Apple.

“The power and breadth of software, the always-on capabilities of a mobile phone, great browsing and productivity in addition to the basics like printing,” Ballmer said. “Windows has the breadth and depth and the flexibility to define and deliver this next generation.”

Despite earning hefty revenues from traditional product lines such as Windows and Office, Microsoft has found itself increasingly under fire from analysts and pundits who see the company lagging behind Google and Apple in the increasingly important areas of tablets and smartphones.

In a bid to reverse its declining market-share in mobile, Microsoft fast-tracked Windows Phone 7, a smartphone operating system expressly designed to counter Apple’s iOS and Google Android. Unlike the latter two operating systems, based on grid-like screens of individual apps, Windows Phone 7 consolidates applications and Web content in a series of subject-specific Hubs. Microsoft’s launch was fairly broad-based, with nine phones on 60 mobile operators in 30 countries.

That user interface earned mostly positive reviews from critics, and Microsoft claims that manufacturers have sold some 1.5 million Windows Phone 7 units to retailers. However, it remains unclear how many of those devices have found their way into consumers’ hands.

For his part, Ballmer used his keynote to tout everything except smartphone sales numbers. “There are already more than 5,500 apps available to customers,” he said. “More than half our customers download a new application today.”

He also insisted that Microsoft will continue to invest “aggressively” in the platform, and confirmed that a series of updates will be pushed automatically to users in the next few months. Those will include “copy-and-paste and significant performance improvements when loading and switching between applications.” He added that Windows Phone 7 smartphones, currently available only on GSM-based networks such as AT&T, will appear on Verizon and Sprint in the first half of 2011.

But Windows-powered tablets remained conspicuously missing from Ballmer’s keynote.

Ballmer’s 2010 keynote included the revelation of three consumer tablets, including one built by Hewlett-Packard. Although his unveiling of Windows-based tablets predated Apple CEO Steve Jobs’ revelation of the iPad by a couple of weeks, Microsoft found itself outpaced in the tablet arena throughout the rest of the year: while the iPad went on to sell roughly a million units a month following its April release, and manufacturers such as Samsung rushed to embrace Android-based tablets, Microsoft remained largely out of that game.

As summer gave way to fall, Microsoft executives started talking about how Windows tablets were indeed in the works – once an upcoming generation of mobile-centric Intel chips allowed for devices with superior battery life and sufficient processing power. HP made good on predictions of a Windows-based tablet with the Slate, but that product – billed as primarily for the enterprise – appeared very much a limited-run device.

In the weeks preceding Ballmer’s keynote, rumours circulated that he would use the event to unveil a series of Windows-based tablets to compete against the iPad and tablets like the Samsung Galaxy Tab.

Instead of tablets, Ballmer and Microsoft corporate vice president Michael Angiulo demonstrated a series of Windows 7 PCs with touch capability, including an Acer laptop with a second touch-screen in place of a keyboard. They also showed off Surface 2, the next generation of the company’s table-sized touch-screen tablets. The new version runs Windows 7 and is fronted with Gorilla glass.