During its annual shareholders' meeting, CEO Steve Ballmer also dismissed market share gains by Apple's Mac computer to "a couple of tenths of a percent" and said that many young people would eventually outgrow their preference for Macs.
"Some of it is marketing, some of it is phase of life," Ballmer said in response to a shareholder question about Microsoft's poor perception among younger buyers. "The truth is we do quite well, even among college students.
"Windows 7 gives us a real opportunity to get back that audience," he continued. "With the down economy, people understand that the Mac is a lot more expensive for essentially the same computer" as Windows 7.
Ballmer said Microsoft plans to keep investing in web search, the Windows Mobile operating system and cutting-edge technologies, such as the Xbox's in-air motion controller, Project Natal.
He defended the Windows Mobile OS from a questioner, saying it was a "small but important fact, that we have quite a bit more market share than Android. We have about 10%-12%, Android has 3%, iPhone about 20%, RIM 20%-25%, and Nokia about 45%."
"It is a competitive game," he continued. "We have a lot of opportunities to improve our products and market position."
Addressing persistent rumours of a Microsoft-manufactured phone, such as a Zune Phone, Ballmer said, "We think we have the right strategy, which is to focus on the software, not build a phone, and offer a diversity of phones like we offer a diversity of Windows PCs."