Q&A with Bill Gates: Microsoft's pushing its frontiers

REDMOND, Wash. -- Q: What's the coolest thing about the upgraded Zune?

A: Look at this thing! (Holds up a Zune 8) Three or four years ago there was nothing like this. This is cool as heck. I'm finding music I haven't seen in 20 years. Hey, the Lovin' Spoonful? They're in this thing. I find one of their songs. I send it to friends I had an apartment with, it was actually 30 years ago. I can send it out to them and say, "Remember when we listened to this?" It's amazing.

Q: Up until last year, you and your hardware partners were pitching 70 different portable music devices. What persuaded you to change?

A: In the video game and music player markets, the experience is about everything working end to end. We decided this was going to be more important in this category than anything else. So we made a choice to use the Xbox approach for our music player, where we take the full responsibility for the entire experience. And obviously Apple was using that model (for the iPod).

Q: Taking the Xbox approach makes sense, since Xbox 360 has surpassed Sony's PlayStation 3. Sony is no Apple when it comes to marketing pop culture icons.

A: Once upon a time a statement like that would have been considered heresy. It's great to have a very capable competitor. This is a category where you can have two very successful companies. I think there will be a temptation for people who have older devices to buy newer devices. So we expect some people who bought from us or Apple in the past will go in and be part of the marketplace of buying these devices.

Q: What are short-term expectations for Zune?