Gates: Cracking the mobile market

One of the other areas that you guys have talked about, longer-term, is having more-detailed presence information, where you might have a phone that knows where your buddies are in relation to you.
One of the new things in the platform is what we call the location API. It gives the GPS location up to the software and then, if you have chosen to reveal your location, say, to your buddies... and if they decide to reveal to you, than we can use map-type displays and you can see where those people are.

That scenario, in particular, is one that we think is really explosive. It will become just common sense. It's obvious you ought to be able to push and see a map and there's the information.

Microsoft made an interesting choice when it was first trying to get into the mobile phone market. There weren't a lot of tier-one mobile phone makers lining up, but Microsoft went to some of the contract manufacturers that make PCs in Taiwan and elsewhere. It seems like early on Microsoft recognised that the carriers were the gatekeepers and found another way into the market.
We certainly had some very important relationships with the mobile phone makers, and we've done some work [increasing] the number [of mobile phone makers]. Samsung is talking about their plans for this platform. But the highest volume, actually, has been an Asian company called HTC that has done a lot of different things; one of them is being so responsive to the carriers.

You're right that a good place to start is having the operators like you. In fact, that's an absolute requirement. A lot of their requests about customisation used to take us a lot of hand work to do what they wanted.

With Windows Mobile 5.0, we've taken a lot of the customisation and made it really trivial for them to do it — the way they brand things. We make it so they can do that very rapidly. Being a friend of the operators is part of the strategy.

(Windows chief) Jim Allchin said a couple of weeks ago that he still sees Microsoft as the underdogs. Do you still feel that way about Microsoft in the mobile space?
Well, Nokia is the leader by far. We definitely prefer the press coverage we get when we are considered the underdog in a category. We're just an underdog, keeping the guys that are on top, keeping them honest. I'm not sure what the term (underdog) implies. We are a significant factor in the market even beyond our market share. There will always be many companies in this space and, at least for the foreseeable future, Nokia is the leader.

One area of mobiles that Microsoft hasn't gone after yet is portable gaming. Do you see that happening at some point?
It is very interesting, the increased amount of gaming taking place on these phone devices.

But in terms of consoles, you have the Xbox — a desktop console — but there is a pretty big portable console market. Is that something Microsoft is interested in?
Obviously, Nintendo is dominant in that market, and everybody is watching what Sony can do with the PSP. Speaking from Microsoft broadly, we like that Sony is off worrying about the PSP and thinking about that while we are worried about the TV-based console, the next generation of Xbox that we are moving forward on. There actually is a dedicated device that uses Windows CE. It's fairly cool. I've played around with it. But we don't have any current plans to be in there with a dedicated product. We'll keep making our phones good [starting places] for [gaming] and see how that space shakes out.