Ballmer: iPods packed with stolen tunes

At the heart of his criticism of Apple was DRM (digital rights management) technology, which aims to help content providers such as record labels and movie studios control their intellectual property--or at least ensure all royalties are paid and copyrights observed.

"We've had DRM (digital rights management) in Windows for years," Ballmer said. "The most common format of music on an iPod is stolen."

He added: "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."

However, Ballmer conceded it isn't going to be an easy battle to win. "Most people still steal music," he said. "We can build the technology, but there are still ways for people to steal music."

The Microsoft chief also claimed some domestic familiarity with the issue.

"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," he joked.

Andy McCue of Silicon.com reported from London. Michael Parsons of ZDNet UK contributed to this report.