Newsmaker: Ballmer discusses life after Vista

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But at the same time, I don't want anybody to be confused: big innovation on the Internet doesn't happen in six months either. Until recently, Google hadn't changed their search engine, nor would they change the number of documents that they indexed, for years. There's a reason why they do that: that's the core thing that they can't afford to screw with. Because (if) you make a small change, you could actually hurt relevancy in ways that you don't intend, not just help relevancy.

So when people get dependent on something, it's likely to change just a little less frequently.

So, let me ask this question a different way then: Does Windows Live give more flexibility in how you roll out functionality, wherever it may be?
Ballmer: Brand Windows Live has a broader footprint of capability and options. Now we have Windows, we've got Windows Update, we've got Windows Live that can all deliver the fundamental experience that people will want on a PC.

Let's talk about Windows Mobile. You have said that you could foresee mobile licenses, or shipments, outpacing desktop licenses at some point. Could you talk a little bit more about that?
Ballmer: Let's say the PC market is roughly 200 million units these days, and let's say the PC market goes great guns over the next several years and grows 14 percent or 15 percent a year. Those are big numbers. You go great guns, China booms. You get maybe over 400 million in a few years. The cell phone market is already a billion units a year, and the truth of the matter is that what I'll call "smart devices," as a percentage, the total is rising dramatically.

When it comes to smart devices, there really aren't that many players. Basically, you have Nokia/Symbian, you've got us. Actually, I'll be so bold as to say that the two of us stand out in that area. Then you have some guys who are more niche players--Palm is more of a niche player, (Research In Motion's) BlackBerry is more of a niche player, those Linux devices from Motorola, particularly in China, (mean it) is more of a niche player.

You have some things intermediate between dumb and smart devices--kind of the J2ME-type phones--but when you talk about real smart devices, there's really two guys who I think are broad frontline players and have most of the share. It often surprises people when we tell them how much we outsell BlackBerry. BlackBerry, because they are more popular in the United States, people assume that they're quite popular. The truth of the matter is we actually outsell BlackBerry many factors to one, that's worldwide, yeah, absolutely.

What happens when Apple produces a smart phone, which they probably will at some point? How does that change the equation?
Ballmer: Well, their business model will look a lot more like the business model of the Trio and BlackBerry, than it does (that of) us and Nokia. Nokia is sort of having their cake and eating it, too, a little bit, with Symbian. Hey, in no business that we're in, can we expect that other people aren't going to enter and bring some creative ideas. We will see what Apple does.

The thing that is going to drive Apple, you know, people talk about the iPod halo. At some point, do you hope for a Zune halo effect that would help with Vista?
Ballmer: Well, sure. I can't say there is, yet. Eventually, there needs to be, will be. But we've got to get out and establish Zune. We think we have a great initial proposition, and we're happy with the initial response. But we don't fool ourselves. There's a guy who's got a lot of share, and we're coming later in the day. Things boomed on the back of the iPod, so we have our work cut out.

Are you happy with the response to Zune so far?
Ballmer: So far, so good. But we're (in the) early stages.

Speaking of servers. Is Longhorn Server on track for 2007?
Ballmer: No new news on that. It brings a wave of innovation with it, too. Primarily, in a sense you could say the wave of innovation a year ago with Visual Studio and SQL Server was primarily aimed at the developer. The wave of innovation with Vista and Office is aimed at the end user and the business. The wave of innovation with Longhorn Server and some of the things that come with that are really aimed at IT and the data center, more than anything.  

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