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Originally published July 29, 2010 at 9:45 PM | Page modified July 30, 2010 at 5:52 PM

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Microsoft aims to be friends with consumers

Pitching to 200 financial analysts Thursday, Microsoft grabbed the mike and said the company gets consumers and is ready to compete mightily against Apple's red-hot iPad.

Seattle Times technology reporter

Pitching to 200 financial analysts Thursday, Microsoft grabbed the mike and said the company gets consumers and is ready to compete mightily against Apple's red-hot iPad.

Chief Executive Steve Ballmer laid out a lineup of Microsoft products — Xbox, Bing, Windows 7, and the Windows Phone 7 coming in the fall — all designed to appeal to mall shoppers.

"From time to time, in discussions I have with some of you, we talk about the consumer like it's broad, airy-fairy," Ballmer said. "In our case, the consumer investments and innovation and work that we're doing really focuses in a few areas."

The Kinect sensor for the Xbox system, which allows people to play video games without a controller, will start selling for the holidays.

Microsoft's search engine Bing, which analysts drilled executives over at last year's meeting, has gone from 8 to 13 percent market share, although Google remains king of search.

The empty spot in the Microsoft lineup is a slate device. Microsoft has been putting Windows on touch-screen tablet PCs that use a stylus since 2002, but they have been left behind by Apple, which has sold 3.27 million iPads since April.

"They've sold certainly more than I'd like them to sell," Ballmer admitted.

Ballmer said Microsoft is pushing hard to get a slate built that runs Windows 7.

"They'll be shipping as soon as they are ready," he said. "And it is Job One urgency around here. Nobody is sleeping at the switch."

The company also showed off what Windows 7 might look like on a slate, one that would connect to a "personal cloud," or data stored across someone's work computer, the Internet, Xbox, laptop or a home computer.

Brad Brooks, a corporate vice president, used a Windows slate like a remote control to find video on the Internet and played the video on an Xbox-connected television at home. He also used the slate to hold a video chat and shared photos.

Microsoft's turnaround from business to consumers feels a bit back to the future. A decade ago, corporations said Microsoft wasn't secure enough for corporate use.

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Microsoft sales to businesses may have now eclipsed consumer sales. Still, Ballmer pointed out Thursday that of the 400 million PCs sold each year, two-thirds are sold to consumers.

"Microsoft has been criticized as being very enterprise-driven," said Neil MacDonald, a vice president and fellow for Gartner, a research group in Stamford, Conn. "They're getting hammered by Apple, which is first and foremost a consumer company. Twenty years ago, Microsoft was all about consumers."

To reach consumers, Ballmer said Microsoft will open three more retail stores: in Bellevue Square, the Mall of America in Minnesota and Oakbrook Center in suburban Chicago.

Although analysts were fixated on questioning executives about consumer products such as mobile phones and slates, some ended up most impressed by a breakdown of Microsoft's business-sales opportunity with cloud computing.

Peter Klein, Microsoft chief financial officer, presented the company's case to gain more share of global IT spending by selling cloud-computing services.

"Toward the end, the CFO laid out a good case for why Microsoft will get a bigger piece of the pie" with cloud computing, MacDonald said, even though he did not think the services will be as profitable as selling software. "I've been to several (financial analyst meetings) and they never hit this head-on," he said.

All Microsoft top executives — the chief-level officers, division presidents and several senior vice presidents — turned out Thursday to talk to scrums of analysts in the hallways, at a technology showcase and over lunch under a white tent in Redmond.

The all-day schmooze appeared to float Microsoft stock as the rest of the market sucked a little wind. Microsoft shares closed up at $26.03 after rising 8 cents.

The rest of the market ended the day slightly down, with the tech-heavy Nasdaq falling 0.6 percent to 2,251.69.

Sharon Pian Chan: 206-464-2958 or schan@seattletimes.com

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