Next Microsoft operating system has touch controls

Vista followed five years after the previous Windows upgrade and was beset by delays due to the complexity of updating a piece of software with some 50 million lines of code that runs on more than 90 percent of the world's computers.

After the problems of releasing Vista in a timely manner, Ballmer pledged to never again wait so long between releases of its Windows operating system. Microsoft has said it expected to release the new operating system code-named Windows 7 around three years after the early 2007 release of Windows Vista.

Ballmer acknowledged that Microsoft considered Apple a formidable competitor. But he said the two companies' audiences were vastly different in scale, with Apple supplying around 10 million computers this year versus the roughly 290 million machines which PC makers will sell running Microsoft Windows.

"Whether Apple has a PC with touch in it to market first, we'll see," Ballmer said.

(Additional reporting by Daisuke Wakabayashi in Seattle; editing by Sue Thomas)