| | UPDATE:Gates Says Microsoft Will Compete For No. 1 In Games...
By PAULA L. STEPANKOWSKY
May 2, 2005 7:10 p.m.
Of DOW JONES NEWSWIRES
SEATTLE -- As Microsoft Corp. (MSFT) prepares to release the next generation of its Xbox gaming console in several weeks, Chairman Bill Gates said he believes the company is in a position to compete for the No. 1 spot with Sony Corp. (SNE) and its Playstation franchise.
Microsoft came out of the first round of computer game competition a "very strong" No. 2, Gates said in a wide ranging speech and question and answer session at the American Society of Business Editors and Writers conference here Monday.
"What we got in this round was the ability to play again" and to play with greater strength, Gates said.
Both companies will be "very big" in the coming competition, with Nintendo more likely to be "a niche player this time around," Gates said.
While Gates said he couldn't predict whether Microsoft would actually gain the dominant position, he said employees in that Microsoft division are doing their best to attain that goal.
Microsoft will increasingly integrate its software so that users can easily shift from using their PCs to gaming, to instant messaging or another related activity, Gates said.
To that end, the company continues to invest heavily in research and development, something Gates said is the most important thing the company has to offer.
"We are as big a change agent as any company is or has been," Gates said.
Microsoft rival Apple Computer Corp. (AAPL) has been in the news in the past week as it unveiled its new operating system called Tiger. It has a number of features, including window transparency and improved search function, that will also be on Microsoft's next operating system, codenamed Longhorn.
Longhorn, however, will not be released until late in 2006.
Gates said he doesn't think Microsoft will have trouble persuading consumers to use Longhorn despite the competition from Apple.
"Longhorn is not the same as Tiger, but there is significant overlap on hardware," he said.
Buyers of new personal computers will automatically get the upgrade to Longhorn, while owners of existing PCs will likely upgrade over time.
He added that he thought it was "great" that the mainstream press had taken up coverage of a software operating system even though it was for a rival.
Asked if he thinks technology stocks are overvalued now, Gates said there is as much overvaluation as there is undervaluation.
However, he said the current market is not like that of 1999, before the Internet bubble burst, when people were questioning how some companies could ever grow into the valuations investors had given their stocks.
Echoing themes of recent speeches, Gates said he remains concerned about the quality of education in the U.S., particularly in high school - something that directly affects the country's ability to compete with rapidly growing economies in China and India.
"Great advances in the economies of other countries are actually an advantage to the U.S., but we must improve our own game to ensure the pie is still large," Gates said.
-By Paula L. Stepankowsky, Dow Jones Newswires; 360-636-2008; paula.stepankowsky@dowjones.com |
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