"We want smart devices to work the way we work, to recognize us and our actions. Speech recognition, vision, handwriting recognition, touch interfaces, these are all part of the theme," Ballmer said. "And certainly whether it's in phones, or what we've done with Kinect for large room, and living room type environments, for vision, and visual recognition are all emblems of the move in this direction."
Ballmer also expressed frustration about having released Windows Phone 7 to the market last fall.
"Another big sort of effort for us in terms of transforming the future of communication is the Windows Phone, he said.
"We came to market with Windows Phone about a year later than I wish we had, shame on us.
But, we're moving forward very actively. We launched Windows Phones last November. We've done a set of upgrades. We have a release that will come to market later this year in Japan. Not only is it a new release that is now much more global, but we've added over 500 new features to Windows Phone."
Later today, Microsoft has a big launch event to talk about the next release of Windows Phone.
Finally, Ballmer turned his attention to what Microsoft is doing on Windows 8.
"We're obviously hard at work on the next version of Windows," he said. "Windows 7 PCs will sell over 350 million units this year. We've done a lot in Windows 7 to improve customer satisfaction. We have a brand new user interface. We've added touch, and ink, and speech. And yet, as we look forward to the next generation of Windows systems, which will come out next year, there's a whole lot more coming. As we progress through the year, you ought to expect to hear a lot about Windows 8. Windows 8 slates, tablets, PCs, a variety of different form factors."
Tablet PCs that adopt Windows 8 and ARM-based processor are expected to appear by the end of 2011, according to the latest information coming from industry sources.