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Gates sees a richer mobility

Gates says he expects Microsoft to gain share in the mobile software field.
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CNN's Richard Quest talks to Bill Gates.
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(CNN) -- CNN anchor Richard Quest in London spoke to Microsoft chairman Bill Gates in Los Angeles on Tuesday, following the release of a new version of Windows Mobile software. Following is a transcript of part of their conversation.

Richard Quest: Do you accept it was a slow start (in mobile phone software) and that other manufacturers did gain a march on Microsoft?

Bill Gates: Well, Nokia is a leader in this business and they've been in it a very long time. As the phone becomes richer the power of what we do in software and particularly what we let other developers do, because we have the best tools, that becomes more and more important. We're seeing media coming down on to the phone -- not only music but even video -- and so the way it works, together with your PC and the software, needs to be more intelligent -- these are playing to our strengths. So the key is to look at the years ahead where certainly we'll be gaining share and we're very happy where we are.

Quest: That's the point. Until now the phone has been something where you send a text message or make a phone call. When the phone becomes integrated with PCs and with all these other MP3 players, that's when your might, your muscle and your money come into play.

Gates: Actually, it's the intelligence of the software that becomes more important. You want to use the same playlist on the PC as on your phone, and you want to have your mail come, to have the richness of your schedule. All of those things are newly possible on the phone, so the phone is changing and that's where Microsoft can help out in setting standards, and in providing software, including today's newly announced Windows Mobile 5.0.

Quest: Let's talk about the Longhorn operating system. The problem is, it seems to have been a long time coming and there seems to be a long wait to come.

Gates: Well, certainly we're hard at work on the next version of Windows, which is codenamed Longhorn. There's a lot we can do for users there. We're expecting to get that done some time late next year. We get user feedback. There's a lot of excitement about what we're building there.

Quest: Is there a difference in the way Longhorn is being brought out in the sense that it's better to iron out all the bugs first and put it on the market as a ready product?

Gates: Well, there's certainly an increased sophistication in terms of the depth of how we do the code reviews and even the new tools that do things automatically, and so as we've done with every release of Windows, the newest release will be the highest quality and reliability we've ever done and so that's part of why it takes billions of dollars of hard work to move Windows up to a new level.

Quest: You mention that -- does it worry you that because your operating systems are in 90 percent of the world's computers, Microsoft is the target for every hacker, every virus writer and every mischief maker in the world?

Gates: In fact we're very proud of the work we've done to make Windows resilient. If you look at spam, that's come down quite a bit. We're building a lot more capabilities into Longhorn. We can make it nearly impossible for them to get into these things, so that's part of the value we bring, constant monitoring, constant invention, to stay ahead of those problems.

Quest: On a personal note, do these people doing malicious things annoy you, do they enrage you?

Gates: Yeah, certainly most of the things you mentioned are actually illegal so we're partnered with law enforcement, making sure the law covers these things and often engaging in enforcement actions. So a combination of the technology making it much harder, and then somebody being fraudulent and then some enforcement shows that it's just not allowed.

Gates: In the world of software, (from) the people who bought those products there's no more revenue. So it's only through breakthroughs that we get additional revenue. So in no sense can we ever stand still. So it's the most exciting field to be in and necessary for us to advance.

Quest: You said in Davos you wanted a spirit where governments competed with one another to do more for poverty and AIDS. Are you satisfied that that competitive environment has now come about?

Gates: Well there's certainly more that the rich countries can be doing and the next big event is the G8 summit in July in Scotland, and we'll see what additional measures can be taken there. We do need more resources to meet the incredible challenges they face and I'm still hoping to see more. I'm hopeful this year there will be additional activities that take place - certainly the leadership from the UK with the Commission on Africa makes me feel there is higher awareness now than ever before.

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