Ballmer Delivers Confident CES Keynote

Anyone hoping for a blockbuster revelation from Microsoft during CEO Steve Ballmer's annual keynote address last night at the 2011 Consumer Electronics Show (CES) was no doubt disappointed, as the software giant unveiled no major new initiatives. In retrospect, however, this seems to be part of a plan to exude a quiet confidence in the future rather than adopt the Chicken Little stance of many of its followers. Ballmer's message was simple: Microsoft had a great 2010, and the company is going to do even better in 2011.

"2010 was an incredible year with over one billion consumers experiencing Xbox, Windows Phone, and Windows PCs, and much, much more," Ballmer said during the keynote. "So, we want to start by saying thank you to the over one billion customers around the world for their support and feedback ... we want to share with you not only what we've done most recently, but a little bit of what's coming next."

Let the sharing begin.

Ballmer's keynote focused on three key areas that—not coincidentally—related to the three screens part of his company's "three screens and the cloud" mantra. What's different in 2011, however, is that the company now has a viable product for all three of those screens, which include the PC (Windows 7), the smartphone (Windows Phone 7), and the TV (Xbox 360).

The keynote was heavy on milestone numbers and statistics and light on the futuristic stuff. The message, in a way, seems to be focused on ongoing success and less on promises that may or may not materialize. Thus, even the revelations about future technologies were for advances that will appear in the next few months, and not later in the year or beyond. Ballmer didn't even utter the word "tablet" until his closing remarks. Seriously, think about that for a moment.

So, what did Ballmer and company announce?

First, Microsoft's current products are huge successes in the market already. Some key facts, figures, and milestones, all of which were aimed at driving home this point, include:

• Microsoft has more than 1 billion customers around the world.
  
  
• 2010 was the biggest year ever for the Xbox 360, thanks to the release of the second-generation Xbox 360 S console, the Kinect motion sensor add-on, and advances in Xbox LIVE. This is the realization of a "bold step a decade ago" and has "transported" tens of millions of people into the worlds of many blockbuster games, including those in the Halo, Gears of War, Call of Duty, and Fable, among others.
  
  
• Microsoft expected to sell roughly 5 million Kinect motion-sensor add-ons for the Xbox 360 during the final seven weeks of the year, but it ended up selling a whopping 8 million units. Ballmer didn't say this, but that makes the Kinect—and not Apple's hypetastic iPad—the fastest-selling consumer electronics product of all time.
  
  
  
  
• There are more than 30 million customers subscribed to Xbox LIVE now, and Microsoft adds a new member every two seconds. The company didn't discern between free and paid (Gold) subscribers, however.
  
  
• The Xbox 360 was the number-one-selling console in the United States for every one of the final six months of 2010.
  
  
• Microsoft has sold more than 50 million Xbox 360 consoles worldwide.
  
  
• Windows Phone 7 is off to a great start since its October/November launch and now commands an apps store with more than 5,500 apps. More than 100 new apps are added to the Windows Phone Marketplace every 24 hours.
  
  
• One of the biggest advantages of Windows Phone 7 is its games collection, in particular its Xbox LIVE games. As of today, there are more than 45 high-quality Xbox LIVE games available for Windows Phone 7, many of which are exclusive to this platform, and all of which provide Xbox LIVE-specific features like achievements.
  
  
• There are more than 20,000 Windows Phone developers registered with Microsoft.
  
  
• On AT&T, 9 out of 10 Windows Phone customers evangelize the phone to others.
  
  
• Windows 7 PCs are "the fastest-selling PCs in history," with more than seven copies of Windows 7 sold every second. Windows 7 represents over 20 percent of "all the PCs connected to the Internet." (What Microsoft didn't specify was a new unit-sales milestone for Windows 7. The last-stated milestone was 240 million copies of as October 21, 2010.)
  
  
• More than 20 million people have downloaded the Internet Explorer (IE) 9 beta since its release in September.
  
  
• Although the iPad has generated a lot of excitement, Microsoft's touch-base Windows 7 offerings are more sophisticated and combined pen-based writing (with handwriting recognition) with Windows Touch-based multitouch functionality. Thanks to integrated "palm rejection" technology, the system knows when you're writing and ignores your hand pressed on the glass. The net effect is that the iPad is looking like finger painting by comparison.

As for the future, Microsoft did provide some interesting glimpses at technology that will, again, appear before mid-2011 and not at some unclear future time. These include:

• Kinect motion- and voice-based control of the Netflix On Demand service via Xbox 360. (This requires an Xbox LIVE Gold subscription as well.) When? In a couple of months.
  
  
• The availability of the Hulu Plus TV subscription service on the Xbox 360, including Kinect motion- and voice-based control. (This, too, requires Xbox LIVE Gold.) When? Later this spring, United States only.
  
  
• An expansion of Microsoft's partnership with the ESPN sports network, although this was one of the few areas where details weren't provided.
  
  
• Avatar Kinect, a free addition to the Xbox 360 user experience that adds facial expression recognition (raised eyebrows, smiling, and so on) and a number of "sets" in which you can virtually interact with other people's avatars. This requires an Xbox LIVE Gold account.  When? This spring.
  
  
  
  
• Microsoft plans a "series of updates" to Windows Phone "over the next few months" that will "automatically be pushed out to customers." Among these updates are the addition of copy-and-paste support and "significant" performance improvements, especially to application and game load time. (This has been a frequent criticism of Windows Phone.)
  
  
• Another update to Windows Phone 7 will bring this exciting new platform to the Sprint and Verizon wireless networks "in the first half of 2011."
  
  
• Microsoft showed off a number of innovative PC designs that will go on sale in the next few months, all running Windows 7. Key to these new form factors are efficient new chipsets, like the Intel "Sandy Bridge," the second-generation iCore platform that combines the CPU and GPU into a single chip. Also, Intel's Oak Trail platform, which is the next-generation Atom chipset, so power efficient that PC makers can build machines with no cooling fans for silent operation.
  
  
• Microsoft announced a new version of its Surface technology that offers dramatically improved form factors that can be used in far more situations. Gone is the big box with integrated cameras, replaced by a 4"-thin screen in which every pixel is essentially a camera, providing PixelSense infrared sensor capabilities. The new Surface runs on Windows 7, which makes plenty of sense, and can be hung on the wall and not just moored to the floor. It's also a lot less expensive. Suddenly, what was a niche product could have a breakout year.
  
   

Additionally, Microsoft discussed some admittedly vague ideas about the next version of Windows, called Windows 8, which will run on ARM-based platforms as well as traditional x86 PCs. Upcoming ARM- and x86-based "system on a chip" designs will allow Windows to become available on devices as small as a smartphone, since the chips are just the size of a fingernail. These systems are still two to three years out, according to the evasive Steven Sinofsky, who heads Microsoft's Windows division. But Ballmer noted that this expansion of Windows means that Microsoft's flagship OS "will be everywhere on every kind of device without compromise; all the performance and flexibility of Windows on low-power, long-lasting devices."

So there you have it. Naysayers will tell you that Microsoft didn't shock or awe anyone at this year's CES keynote. But when you look over the vast array of information that Ballmer and company provided, it's hard to argue against the software giant's quiet confidence. It's exactly the type of leadership Microsoft needs to exude in a time of unparalleled angst.