Ballmer opens up on Microsoft's future

Despite digital rights management (DRM) technology, isn't piracy still rampant?
"We've had DRM in Windows for years. What's the most common format of music on an iPod? Stolen. Most people still steal music. The fact that you can buy it and it's protected doesn't affect the fact that most people still steal. I'd love to say all problems have been solved, whether it's iPod or iTunes -- where Apple has done some nice work, no doubt about it -- but the truth of the matter is we can build these technologies, but as long as there's alternate forms of music acquisition, there will still be ways for people to steal music.

"Part of the reason people steal music is money, but some of it is that the DRM stuff out there has not been that easy to use. We are going to continue to improve our DRM, to make it harder to crack, and easier, easier, easier, easier, to use. My 12 year old at home doesn't want to hear that he can't put all the music that he wants in all of the places that he would like it."

Are we close to a tipping point with digital media devices and home entertainment?
"I think we are close to the tipping point, to where we may get a device that can take on critical mass. There will be an explosion in demand. People weren’t really sure where these new devices fitted in. At two hundred bucks, maybe, but at three hundred or four hundred bucks, it was too hard to bootstrap the device type. You mention Apple, and with great respect for Apple, there's no way anything gets to critical mass with Apple, because Apple just doesn't have the volumes. They don't have the volumes anywhere in the world; they don't have the volumes particularly in some countries. The critical mass is going to have to come from the PC, or the next-generation video device."

Are you interested in the cable set-top box market?
"[Not in the cable-top boxes themselves] But Comcast in the US is using our cable set top box software. We're interested in very basic end-to-end IP-based set-top box devices. We’ve seen a surge of interest from the telcos, as everyone is looking for a triple play -- voice, video, data."

Microsoft's smartphone has been a slow seller while Apple and other companies have stolen a lead in portable music player markets. How will Microsoft tackle that?
"Over time most people will carry a phone that has a little hard disk in it that carries lots of music. Mobile phones are about 600 million units a year. How many devices do we want to carry? We have to have a more compelling value proposition. BlackBerry has a niche market position but it's not a very sticky device. It allows you to make bad phone calls but it's a good Exchange client. We will see an explosion of larger keyboard devices."

How long before people recognise Microsoft as a broad software company and not just something on the PC?
"I hope we can accomplish that over the next couple of years."