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>> I'm Ina Fried with CNET News.com at the Venetian Hotel in Las Vegas. Behind me the crowds are lining up to hear Bill Gates deliver what may be his last CES keynote for some time. Earlier on Sunday we had a chance to sit down with Bill Gates one on one, where we talked about the future of consumer technology. For years now, Microsoft has been talking about the power of software moving beyond the PC, and on devices like phones and televisions. That's undeniably happening now, but the real question is will Microsoft software be powering those devices? Or will it be that of Google's or Apple's? Obviously we know where Gates stands, but we talked about some of the reasons why Microsoft believes that the same things that made it popular in the PC will also benefit it on these new devices. One of the themes this year and every year is that, is about how consumers want access to their media wherever they are, on whatever device, seamlessly. It always seems that that seamless piece is the part that's really hard, and where the experience tends to fall short of what we see in demos and keynotes. What are some of the real opportunities coming to fix some of those challenges?
>> Well the power of the machines helps you a lot in terms of any sort of format conversion that has to be done. I'd say the most important step is that you use the cloud so that if you have licensed a piece of music, if you buy a new phone it's there. If you buy a new PC it's there. Making the user move things between devices has been one of the downfalls.
>> In five years where does the company need to have gotten in order to have really met the challenges from folks like Apple and Google.
>> Well Apple of course is a competitor and partner that we've had for a long time. It was only three years after I started Microsoft that I went over to Apple and did the Applesoft Basic for the Apple II. We've got to advance our platform. Windows really succeeded because we had a greater breadth of software available on windows. And now when we think Windows we think Windows Live, we think Windows on the phone. But I love the fact that it's, it's so competitive. Google's ahead in advertising, Apple's ahead with their music devices. There's room for all of us to be successful.
>> Does Warner's move to support Blueray exclusively, does that mean HD DVD is dead? And if so, what does it mean for Microsoft? Obviously you guys have been a big supporter of HD.
>> Well the last studio announcement was Paramount going exclusively to HD DVDs, so there's been some back and forth, and it's kind of a classic format war. The third platform, which I don't think anybody would dispute will win in the long run is directly downloading over the internet. That's the way Media Room TV works, that's the way X-Box Live works. We've got more content with Disney MGM coming on to that. It's been very, very successful. So the actual physical format battle here isn't really in some sense that important, but getting the movie so you can access it through any broadband device, that's, that's the future.
>> Do you think Vista has some work in terms of convincing people that it's something that they really need?
>> Well Vista passed a hundred million, which is a pretty phenomenal number. You know, Vista, a lot of people had put it on their favorite product of the year because they're using neat new features that are there. We certainly had a lot of feedback about getting device drivers, some compatibility things we didn't handle well. So definitely we're a lot smarter there. Vista's a very good product, I'm, I'm proud of the product. So Vista will be a lot stronger in the next year, and you know, we're taking the lessons learned from that and building the, the next great version of Windows that'll be even better.
>> What do you think you need to get from hardcore enthusiasts to the kind of thing where average families want to put a server in their house?
>> Clearly you can't have the people thinking about installing it at all, and I think the Windows Home Server people have done a great job making it so you really just plug it in, and, and you're off and ready to go. But the richness when you get the Windows Home Server thing, that's, that's hard to match, particularly now that we've got the, the great ease of use.
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