Microsoft CEO Ballmer: Xbox Passes Apple Among Young Consumers

LAS VEGAS—Microsoft CEO Steve Ballmer used his Jan. 5 keynote at the Consumer Electronics Show to promote his company’s consumer initiatives, particularly the Kinect hands-free controller for the Xbox 360 and Windows Phone 7. And this being Vegas, he used a Jan. 6 interview with CNBC to essentially double down on his assertion that Microsoft is a preeminent consumer brand—by insisting that the Xbox eclipses Apple in that category.

According to a transcript provided by CNBC, host Maria Bartiromo asked Ballmer: How are you going to get the Microsoft brand to really resonate with the younger consumer out there the way Apple and Google do?

“The most popular young consumer brand in the electronics business is ours, the Xbox,” Ballmer told Bartiromo. “You could say, ‘Okay, we and Apple can go at it.’ But let’s make no mistake about it; for young people today, it’s the exciting things they’re doing, or the things they’re doing in—what we call the entertainment side of their lives.”

Ballmer also asserted that, although Microsoft had made what he termed “big bets” on technology such as cloud and Kinect, major acquisitions were a different story entirely. When pressed on whether Microsoft would consider purchasing Research In Motion—a much-rumored subject in the past—Ballmer seemed reluctant to give a definitive answer.

“I feel pretty good about the bets,” he said. “Now, when does acquisition make sense? That’s a complicated subject, probably best not addressed in this interview.”

Although the Xbox began life as a game machine, Microsoft is using it as a means to assert a substantial presence in living-room entertainment. During CES, he announced Kinect-compatible Netflix and Hulu applications. That would put Microsoft on a collision course in yet another realm with Apple and Google, which are both making living-room forays with their respective connected televisions.

Ballmer had also used his keynote to insist that Microsoft would continue to invest “aggressively” in its Windows Phone 7 platform and issue a series of software updates for the smartphone platform in the next few months. Those will include “copy-and-paste and significant performance improvements when loading and switching between applications,” he told the audience.

Windows Phone 7 smartphones, currently available only on GSM-based networks such as AT&T, will appear on Verizon and Sprint in the first half of 2011. Microsoft is trying to regain market share in smartphones, where it faces stiff competition from both Google Android and Apple’s iOS.