Microsoft Promises Windows 8 User Improvements, Support for Smaller Tablets with 'Windows Blue'

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"Overall awareness and interest in product has been strong and remains strong," Reller stressed. "There is a lot more interest from customers in our touch PCs and in our tablets, but those have been slower to get to volume than we would have liked."

That is a result of the higher prices associated with touchscreen computers. "Microsoft bet big that touchscreen prices would come down, but there is still a significant premium associated with them," Rubin said. "Of course you can get it without the touch, but Windows 8 is optimized for a touchscreen experience."

Microsoft says it is aware of that issue and is working on the usability without a touchscreen and the prices. "Do we want to see more price-competitive tablets in the market across sizes and chipsets? Absolutely. We are doing that work pre-Blue and with Blue to make sure that happens," she said. Still, she added, Microsoft believes that the price of the Surface RT, which costs $599 for the keyboard and tablet, has a stronger value proposition than Apple's $499 iPad. Reller declined to reveal Surface RT and Surface Pro sales figures.

RELATED: 8 Things You Need to Know About Using Windows 8

When asked about the latest IDC report, which found that shipments of PCs plunged 14 percent in the first quarter of this year, Reller said Microsoft's numbers tell a different story. "IDC reports from manufacturers into the channel. Our activation numbers measure when Windows 8 get consumed by PCs and come online, both are important to us," she said.

Listening to Users
So how exactly is Microsoft gauging user response if not for returns or sales? Actual user interaction with the software, online feedback, customer satisfaction and service data, and a host of other sources, Reller says.

"We are getting meaningful feedback through telemetry -- anonymous user telemetry. We see how customers are using the product, that's a big set of data points," she explained.

Microsoft plans to detail the exact changes in Blue over the next couple of months. However, even before Blue or Windows 8.X is released Reller said there will be significant new apps coming to the app store and a series of new computers with higher resolution screens and thinner designs arriving in time for back-to-school season.

"People are continuing on using the product," she said. "We want to shorten the learning curve with customers."

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