Q: Microsoft joined hands with NTT Communications regarding Xbox, meaning that Microsoft will be charging money to consumers via communications carriers. This appears to be a new approach that Microsoft never tried with a personal computer.

A:Is communications free? You have to pay to use an i-Mode phone. You have to pay when you have cable TV. What about the phone? People have to pay for communications. The reason why Microsoft charges money from communications fee is because the business model is different from that of personal computers. All the products in the world is either subsidized or non-subsidized. PC hardware and TV are not subsidized, so the hardware price includes development fee, etc. On the other hand, cell phones and game consoles are sold at low prices, instead of which you have to have some royalty on the software in order to fund the R&D. This is the subsidized model.

PCs and other devices complement each other

Q:During the past few years, Microsoft's name has often appeared in non-PC-related fields. Among them, what is the most interesting device for you?

A:I'm interested in people rather than the various devices. Microsoft's .NET strategy is not centered around a certain device. It's about all devices. Our expertise is about software. It always has been. So, we have been involved in a greater variety of devices than any other company. Look at what we have done with WebTV, UltimateTV and PocketPC. There are a number of devices in the world. There are large-screen devices, small-screen devices, devices that you sit close with a mouse and pen, and devices that you carry around. Everything that can run software, Microsoft has been involved in. Actually, video games are a sort of the last frontier. It's the one software-driven device in which Microsoft had not been involved.

Q: Listening to you, it sounds like a PC is only one of the many devices. In fact, you even sound like Xbox is to be placed at the center of a house. There are some PC users who are feeling somewhat lonely because it seems you are no longer interested in PCs.

A:There is no one who has been investing in the breakthrough advancements of PCs like Microsoft. The Xbox connects up to the TV and it's purely about having fun. The PC is not just about having fun. You can do your homework on a PC, you can fill out your tax returns, you can plan a trip, you can organize photos and music, and you can edit videos. Xbox is not for such applications. Lots of great software for such applications are available for PCs and the uses of PCs are expanding quite dramatically. The device that you will spend the most time on is the PC. Every year, the PC moves forward. Anybody can write software for it without any royalty. There's nothing like the PC. Look at the volume of the PC and compare it to any other screen-based device. With the .NET strategy, PCs will take on more new capabilities. All of the devices will be made to run in accordance with people's behavior. The .NET strategy allows us to connect the mobile phone, the car computer, the Xbox and so on. Supposing you use your PC to organize a trip. In your car, you can be notified if your flight has been canceled. You can also be notified if the stock price changes quite a bit while you are out.

Q: So, the .NET strategy is not making light of PCs but rather making better use of PCs.

A:PCs have their own use, while portables have theirs. The .NET strategy allows the different devices to complement each other.