Gates Doubts iPod a Microsoft Employee Favorite; "iPod's a Great Success"

Microsoft Corp. founder and chairman Bill Gates said Wednesday he doubted claims that 80% of his employees are iPod owners. Acknowledging the iPod has been a "great success," he said consumers want more choice than what Apple can offer and Microsoft will gain market share in digital media devices in 2005.

In an interview with ABC News anchor Peter Jennings, Mr. Gates said, "I doubt thatis the case" when asked if a recent story in Wired news is correct when it quoted an anonymous Microsoft employee as saying about 80% of the employees at Microsoftis Redmond, Wash. campus own and use an iPod at work.

"Certainly, the iPodis a great success," Mr. Gates said, praising Apple CEO Steve Jobs for having done "a lot of amazing things in our business."

When asked if he owns an iPod, Mr. Gates said, "No, Iim not an iPod user. I use the Creative Zen, which is a fantastic product."

On the subject of the iPodis success, Mr. Gates acknowledged Apple has done a "great job" in marketing and selling the iPod, but refused to acknowledged that Apple had beaten out Microsoft for dominance in music players. Mr. Gates vowed that customer choice will win out in the end.

"Itis their (player), only their one music store, only their device," he said of Apple. "What weire doing is providing choices. So itis like the Apple computer versus the PC. With the PC you can buy from many companies so you get cheaper prices, you get more variety and here with music devices weire coming in with the same. But theyire a strong leader in the space and I think as we gain share, people will be surprised."

Other issues Mr. Gates commented on included:

Speech recognition and integration of the PC and the telephone will become the next big breakthroughs in technology. "I think we will surprise people a bit on how well we will do on our speech recognition," he said. "We have made a lot more progress this year on that."

Google is the leader is search technology, but Microsoft is narrowing the gap. "Weire sort of the David vs. Goliath in that particular battle," he commented. "I think weire actually one of the few companies that can say with credibility that weill give Google some competition."

Microsoft is making great strides in electronic tablets: "Theyill have just a tablet device that they can call up the material on. Thatis been a dream for a long time, weire making progress there. So review of the software projects and encouraging them in terms of what they are doing well and telling them who else they need to work with."