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Q: There wasn’t much mention of Zune today. We keep expecting the next Zune device like the 60-gigabyte version or something else.
A: Zune deserves an event of its own. We clearly don’t have any new model. We just introduced the product three months ago. It’s doing well. We knew what we wanted. Just like the first-generation Xbox, we wanted to get on the learning curve. We wanted to get credibility. We wanted to have a reputation of doing something innovative and something that we could upgrade over time because of the large screen and the WiFi. We feel great about Zune. Sometime this year, maybe twice, we’ll have more Zune events where we talk about concrete things. It wouldn’t have made any sense to a talk about it here for a lot of reasons.

Q: Is there a concern about the attention it has gotten? Some of it, you did with marketing. Some of it we did talking about the competition. The performance compared to the hype might have left it with another hurdle to overcome?
A:  We set our million-unit goal a long time ago. I don’t know what hype you’re talking about. We shared our goal. We may or may not make it. It’s not often you introduce a whole new device and sell a million in less than a year. Can that be done?

Q: Are you on track with your metrics for that?
A: We’re going to have to sell a lot in the second half of the year. We need good strength.

Q: There will be twists and turns. That million is this model, this feature set, this year?
A: We can upgrade the feature set.
Q: I’m eager for more WiFi stuff.
A: You’re going to get over time new WiFi stuff. The WiFi is a powerful feature.

Q: Is video first on the Zune?
A: It’s got two big advantages. It’s got wireless. It’s got a big screen for video. We have to prioritize what connections we do when. You’re right. That’s the clear thing to do. Better PC connections. There is a tone that can be done.

Q: If there is something about what this particular show is about, there is a lot of stuff about moving things around on different devices. In the aggregate, it’s a pretty confusing thing for the consumer to try to take on.
A: On what?
Q: Taking on the job of shifting content from all devices and all times.
A: Say you have an MP3 file.
Q: MP3 is pretty easy.
A: I’ll help you move that around.
Q: What’s the video equivalent of an MP3 file? Unprotected video that works on everything.
A: Managed copy.
Q: You using that?
A: Oh sure. As we bring Live onto the PC, we can set an example of licensing a user across all devices on PC content. We have a unique position on that. Nobody can say that any specific company has this digital rights management thing in perfect shape. Nor can one company alone move it to a perfect shape because the interests of the content providers are legitimate, serious interests. The issue of intellectual property in this area is mind-blowingly complicated. I paid $400 million just for one license. Nobody else, maybe Sony and Philips have that, but no one else.

Q: Now somebody claims they have a patent for selling movies online.
A: Yeah, but these patent things. You have to be careful writing about patent claims. Look at the percentage of patent cases that we win. There are a lot of silly patent claims. Even the good ones, they always get so over-simplified in the press. Has the patent system worked, say, in medicine? How would you feel if there were no pharma companies out there with no incentive to create new medicine? It’s amazing how the patent system has worked. Particularly for people that don’t live it. It doesn’t work perfectly, but it’s amazing how well it works.
Q: What do you think of the combination HD-DVD and Blu-ray players?
A: We’ll see when they come out. Right now, I’m pretty confused about price, compatibility, timing. I know HD-DVD had a better year than you could have imagined, and Blu-ray had a worse year than you could have imagined. I’m biased. Those are the facts.

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[via MercExtra ] 

related articles:
Part 1 of the interview with Bill Gates
CES 2007: Gates keynote edited for Zune
1 million players in 6 months