Microsoft's Bach Predicts 'Good Holiday Season'

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New York - Microsoft will enjoy "a good holiday season," thanks to multiple product and service introductions and recent Xbox price reduction, said Robbie Bach, president of Microsoft's entertainment and devices division.

In general, "technology gifts will be very popular" despite the economy, he told reporters during the company's first-ever pre-season open house. Bach did not project Microsoft's fourth-quarter sales, citing the continuing difficulty in forecasting the economy's performance.

Robbie Bach

Microsoft is building momentum in the holiday quarter via the Oct. 22 launch of the Windows 7 OS, the September launch of the Zune HD portable media player (PMP), and the launch this week of multiple smartphones based on a Windows Mobile 6.5 OS, said to be targeted as much to consumer users as to enterpriser and business users. Other contributor's to Microsoft's fourth-quarter sales outlook include the recent $100 price reduction on the 120GB Xbox 360 Elite to $299, a $299 Elite bundle with two E-rated games, and a Web cam said to be the first to offer widescreen HD video, Bach said.

Bach also cited the launch today of the Windows Marketplace for Mobile application store for Windows Mobile 6.5 smartphones and planned expansion of the store to users of smartphones based on earlier 6n versions of the OS. About 200-300 apps are available at launch, but that number will grow "dramatically" by the end of the year, Bach said.

The Windows Mobile OS, which now promoted simply as Windows Phone, reflects the "merging of workstyle and lifestyle," Bach said.

To encourage users to buy a Windows Phone smartphone, the company launched its My Phone Web-based backup and syncing service, available earlier this year in beta form. It provides free 200MB of storage to backup phone content "in the clouds" and the ability to automatically sync changes made on a phone via Wi-Fi or cellular. Changes made to backed-up content via a browser-equipped PC can also be synced back to the phone.

In a change, the final version of My Phone adds new premium features to help consumers find their phone in case they lose it. From a Web browser, users can force the phone to ring even if it was left in vibrate mode, and users can track the phone's whereabouts via Wi-Fi, cellular triangulation and GPS. Consumers can also remotely lock the phone and post a message indicating who to contact of the phone if the phone is found. A remote-wipe capability lets users wipe the contents of a lost phone.

Other Microsoft services planned in the fall include Twitter and Facebook applications for the Xbox and, following a continuing beta, 1080p movie streaming to the Xbox via Microsoft's Zune Marketplace, which will combine Microsoft's video catalogs for the PC and for the Xbox.

Also in the fall, Xbox users will be able to stream NetFlix movies directly to the Xbox without first using a PC to select a group of movies to be streamed, and they'll be able to stream Internet radio for the first time via the LastFM service.

Also in the fall, Microsoft will offer a Wi-Fi 802.11n adapter for the Xbox, a spokeswoman said.

As for Zune HD, Microsoft "is struggling to keep up with demand," Bach said. "We're working hard on it for the holidays. Added communications director Jose Pinera, sales "exceeded our expectations" and sold out "in many outlets" after its Sept. 15 launch.

On other topics, Bach said:

  • he questioned Google's business model for the Android smartphone OS, calling it "unclear." To compete with Apple, he said, "you need more than just a base OS." Handset makers must make their own applications, such as music players, to ride on top of the OS, so as a result, "every Google phone is different," he said. The product strategy, he said, "feels a little bifurcated."
  • he remains a fervent believer in music subscription-download services despite the slow uptake. To get subscriptions downloads to take off, the music industry must support tiered subscriptions, with low-cost subscriptions perhaps offering access to a more limited selection of songs. "It's hard to get everyone in line" to launch such a business model, he added.
  • Microsoft's first two stores are set to open in time for the Windowes 7 launch. One store will be in California, the other in Arizona.

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