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Microsoft has released Windows 8.1 – an update to its Windows 8 operating system – during a keynote speech at its annual developers conference in San Francisco.

The free test version of the update is available to download now and the full version will be released to Windows 8 users later this year.

Microsoft’s CEO Steve Ballmer also confirmed that the start button has been reinstated in Windows 8.1 after it was controversially removed from Windows 8 last October.

“Let’s make it easier to start applications in the way we are used to,” said Steve Ballmer, to cheers from the audience.

“We will bring back the start button, and you can boot straight to the desktop if you want to.

“We have refined the blend of our desktop experience and our modern app experience.”

Microsoft came under fire for its controversial “start screen” in Windows 8, which gave users a series of tiles instead of a traditional desktop PC menu with a start button.

This left many confused, and caused a slower than expected uptake of the new software – which also faced increasing competition from Apple and the tablet market.

However, Steve Ballmer said Microsoft was not abandoning its start menu and said it was slowly beginning to attract app developers to Windows 8.

“Within this month we’ll pass the 100,000 app mark in the Windows store,” said Steve Ballmer.

Flipboard, Facebook and the NFL all revealed new apps.

The new Windows 8.1 includes a vastly improved “search” function, which lets users search for documents, apps, or items on the Internet from a single search bar.

The feature resembles Apple’s Spotlight feature.

Microsoft has released Windows 8.1 during a keynote speech at its annual developers conference in San Francisco

Microsoft has released Windows 8.1 during a keynote speech at its annual developers conference in San Francisco

Another new feature in Windows 8.1 also allows users to easily see a list of all their apps simply by swiping up on the screen.

“This update shows how much more responsive our engineering has become,” said Julie Larson-Green, head of Windows at Microsoft.

“We’ve had over 800 updates to Windows 8 since we launched it.”

Julie Larson-Green showed off a new Acer 8.1inch tablet running Windows 8.1 – designed to take on the iPad mini.

It uses new gestures such as being able to slide along the screen’s space bar to select menu items.

Julie Larson-Green also showed off a range of touchscreen PCs running Windows 8.1.

“Pretty much every screen you own is going to be touch,” she said.

She demonstrated a convertible Windows 8 laptop that also works as tablet, and large touchscreen machines.

There were also laptops with touchscreens plus an 18inch tablet from Dell that doubles as a desktop computer when docked.

Microsoft has additionally built direct support for 3D printers and even Lego robotic kits into Windows 8.1.

During her speech, Julie Larson-Green unveiled a redesigned the Xbox Music app, a music-streaming service, integrated into all versions of Windows 8, too.

The Spotify-killer app lets owners stream and buy music from anywhere in Windows.

Elsewhere, users can customize the start screen much more easily, changing sizes of app icon “tiles” or controlling which apps appear.

For the first time, it will be possible to open two windows simultaneously in the new-look interface.

Steve Ballmer promised the firm would continue tweaking the software to make it easier to use.

“Rapid release is the new norm for everything we do, from Windows to hardware,” he said.

Windows 8.1 includes Microsoft’s latest browser, Internet Explorer 11, and lets the user restore the address bar and tabs to the screen view.

Earlier this month Microsoft released a preview video showcasing all these new features.

Microsoft removed the button from the Windows 8 operating system when it was released last year but many customers complained and demanded it was put back.

Screenshots leaked in May suggested that Microsoft would be reinstating the button and an official preview video at the start of June confirmed it – albeit not directly.

During the preview demonstration, Harris swipes between screens and lands on the Desktop view.

A Windows logo is shown in the bottom left-hand corner.

Although it will not be labelled “start”, the leaked screenshots suggested that Windows logo would takes the user straight to a grid of applications.

To catch a glimpse of the button, skip to 2.11 in the video above.

That feature was missing in the initial version of Windows 8, which was designed to make the most of limited screen space on a tablet but tended to disorient traditional mouse and keyboard users.

Executives say the plan is now to update Windows periodically, rather than waiting three years or so between big releases.

The world’s largest software company is hoping to kickstart sales of its latest Windows version, which has not made the splash with computer users it was hoping for.

Although Microsoft has sold more than 100 million Windows 8 licenses since October, broadly in line with Windows 7 three years ago, the company must tackle a dwindling PC user base and its inability to make a mark in the exploding tablet market.

Shipments of traditional PCs – the most reliable gauge of Windows’ popularity – are expected to fall almost 8 percent this year, while Microsoft’s Surface has taken less than 2% of the tablet market.

Windows 8 was designed to be used both on touch-screen tablets and traditional PCs.

But while touch-screen users tend to like the new “tile”-based interface, many mouse and keyboard users complained that the new design was confusing.

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Microsoft has made an U-turn over its decision to impose restrictions on pre-owned titles on its new Xbox One console.

Microsoft had said it would restrict the free trade of pre-owned games, and that an internet connection was required to play all titles.

But following gamers’ anger, Microsoft said it would drop the policies.

Microsoft interactive president Don Mattrick said the company had “heard loud and clear” from its customers.

“You told us how much you loved the flexibility you have today with games delivered on disc,” Don Mattrick said in a statement posted online.

“The ability to lend, share, and resell these games at your discretion is of incredible importance to you. Also important to you is the freedom to play offline, for any length of time, anywhere in the world.”

Microsoft has made an U-turn over its decision to impose restrictions on pre-owned titles on its new Xbox One console

Microsoft has made an U-turn over its decision to impose restrictions on pre-owned titles on its new Xbox One console

The statement, which was for some time inaccessible due to heavy traffic, went on to backtrack fully on the controversial aspects of their DRM – digital rights management – plans:

  • “An internet connection will not be required to play offline Xbox One games – after a one-time system set-up with a new Xbox One, you can play any disc based game without ever connecting online again. There is no 24-hour connection requirement and you can take your Xbox One anywhere you want and play your games, just like on Xbox 360.
  • “Trade-in, lend, resell, gift, and rent disc based games just like you do today – there will be no limitations to using and sharing games, it will work just as it does today on Xbox 360.”

The rules apply to games bought as physical discs only, and do not affect games downloaded via the online Xbox store.

“While we believe that the majority of people will play games online and access the cloud for both games and entertainment, we will give consumers the choice of both physical and digital content,” Don Mattrick said.

“We have listened and we have heard loud and clear from your feedback that you want the best of both worlds.”

However, there will be something of a trade-off for gamers.

Microsoft had planned to allow customers to “trade” downloaded games online in exchange for money off new titles. The change of stance means that gamers will no longer be able to do this – something gamers may regret in the future, one analyst suggested.

Questions over the handling of pre-owned games was an unexpected talking point at last week’s E3 conference – the largest games industry event in the calendar.

Sony took the opportunity during its press conference to make a direct attack on Microsoft’s policy.

“PS4 will not impose any new restrictions on your use of PS4 game discs,” said Jack Tretton, boss of Sony Computer Entertainment America, drawing cheers from some attendees.

For Microsoft, it means a second high-profile U-turn in short succession. Last month, it told Windows 8 users that it would be bringing back the iconic “Start” button to its operating system, having previously dropped it from its redesign.

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Facebook revealed today that it received 9,000-10,000 requests for user data from US government entities in the second half of 2012.

The social-network said the requests, relating to between 18,000 and 19,000 accounts, covered issues from local crime to national security.

Microsoft meanwhile said it received 6,000 and 7,000 requests for data from between 31,000 and 32,000 accounts.

Leaks by former computer technician Edward Snowden suggest the US electronic surveillance programme is far larger than was known.

Internet companies – including Facebook, Google, Yahoo, Apple and Microsoft – were reported last week to have granted the National Security Agency (NSA) “direct access” to their servers under a data collection programme called PRISM.

The firms denied the accusations, saying they gave no such access but did comply with lawful requests.

Several also called on the government to grant them permission to release data about the number of classified orders they received.

In an effort to reassure its users, Facebook lawyer Ted Ullyot wrote on the company’s blog that following discussions with the relevant authorities it could for the first time report all US national security-related requests for data.

“As of today, the government will only authorize us to communicate about these numbers in aggregate, and as a range,” he said.

Facebook revealed it received 9,000-10,000 requests for user data from US government entities in the second half of 2012

Facebook revealed it received 9,000-10,000 requests for user data from US government entities in the second half of 2012

For the six months ending 31 December 2012, the total number of user-data requests Facebook received was between 9,000 and 10,000, relating to between 18,000 and 19,000 accounts.

“These requests run the gamut – from things like a local sheriff trying to find a missing child, to a federal marshal tracking a fugitive, to a police department investigating an assault, to a national security official investigating a terrorist threat,” Ted Ullyot said.

“With more than 1.1 billion monthly active users worldwide, this means that a tiny fraction of 1% of our user accounts were the subject of any kind of US state, local, or federal US government request.”

Ted Ullyot did not indicate to what extent the company had fulfilled the requests, but said Facebook had “aggressively” protected its users’ data.

“We frequently reject such requests outright, or require the government to substantially scale down its requests, or simply give the government much less data than it has requested,” he said.

Later, Microsoft also published information about the volume of national security orders during the second half of 2012, stressing that they had an impact on only “a tiny fraction of Microsoft’s global customer base”.

While praising the Department of Justice and Federal Bureau of Investigation for permitting the disclosures, Microsoft Vice-President John Frank called on them to “take further steps”.

“With more time, we hope they will take further steps. Transparency alone may not be enough to restore public confidence, but it’s a great place to start,” he wrote in a statement.

Earlier this month, Edward Snowden, a former employee of defense contractor Booz Allen Hamilton and former CIA technical assistant, leaked details of the PRISM programme.

Edward Snowden, 29, fled the US to Hong Kong shortly before the Guardian and Washington Post newspapers published his revelations.

His whereabouts are unknown, and he has vowed to fight extradition to the US should the authorities attempt to prosecute him.

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Microsoft has announced its new Xbox One’s launch date and price.

Xbox One console will go on sale in November this year, with a recommended retail price of $499 in the US, £429 in the UK and 499 euros in Europe.

The announcement was made during its keynote opening event at the E3 games expo in Los Angeles.

Rival console manufacturer Sony said its console would be out during the “holiday 2013” period, although no official date has been set.

If both the PlayStation 4 and the XBox One go on sale in November this year, it would be the first time the two rivals have launched simultaneously. Previous consoles were released at least a year apart.

Aoife Wilson, a Staff Writer with Xbox 360: The Official Xbox Magazine, said there did not appear to be any reason for the increased price in Europe compared to the US.

“There’s a 34% mark up on the price this side of the Atlantic and there’s no real reason I can see for that”, she said.

Microsoft has announced its new Xbox One’s launch date and price

Microsoft has announced its new Xbox One’s launch date and price

“The price seems to be a real sticking point for many people, based on the comments I’ve seen on Twitter. But the XBox One has so many unique capabilities over its rival, that it might just give them the edge.”

“I think people will be willing to pay that price and I do think that price will come down next year”, she added.

Most of the event was used to showcase the new titles that would accompany the launch.

As both Sony and Microsoft know, a good exclusive title can dramatically increase the popularity and sales of a new console. Many have put the initial success of Microsoft’s first console – the XBox – when it launched in 2001 down to securing the exclusive on the first person shooter Halo.

The first game shown at the event was Ryse: Son of Rome. A first person hack and slash action game, developed by Crytek, it puts you in the boots of a soldier of the Roman empire. The game had originally been announced as a XBox 360 exclusive at E3 two years ago.

Other exclusive titles, such as Killer Instinct and Forza 5 were also shown.

Microsoft also announced it was going to set up five in-house development studios to create exclusive content.

A number of other titles were also showcased, including Minecraft ,the block mining and building game; a new version of Halo due out in 2014; DeadRising 3, a zombie horror game; and a new version of the first person shooter Battlefield series.

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The FBI and Microsoft have broken up Citadel botnet, a huge network of hijacked home computers responsible for stealing more than $500 million from bank accounts.

The Citadel network had remotely installed a keylogging program on about five million machines to steal data.

About 1,000 of the 1,400 or so networks that made up the Citadel botnet are believed to have been shut down.

Co-ordinated action in 80 countries by police forces, tech firms and banking bodies helped to disrupt the network.

“The bad guys will feel the punch in the gut,” Richard Boscovich, a spokesman for Microsoft’s digital crimes unit said.

The cybercriminals behind Citadel cashed in by using login and password details for online bank accounts stolen from compromised computers.

This method was used to steal cash from a huge number of banks including American Express, Bank of America, PayPal, HSBC, Royal Bank of Canada and Wells Fargo.

Citadel emerged after core computer code for a widely used cybercrime kit, called Zeus, was released online.

FBI and Microsoft have broken up Citadel botnet

FBI and Microsoft have broken up Citadel botnet

Underground coders banded together to turn that code into a separate cybercrime toolkit that quickly proved popular with many malicious hackers.

In a blogpost detailing its action, Microsoft said Citadel had also grown because malicious code that could take over a PC had been bundled in with pirated versions of Windows.

The millions of PCs in the criminal network were spread around the globe, but were most heavily concentrated in North America, Western Europe, Hong Kong, India and Australia.

Despite the widespread action, which involved seizures of servers that co-ordinated the running of Citadel, the identity of the botnet’s main controller is unknown.

However, Microsoft has started a “John Doe” lawsuit against the anonymous controller, believing him to use the nickname Aquabox and be based in Eastern Europe.

In addition, the FBI is working with Europol and police forces in many other countries to track down and identify the 81 “lieutenants” that helped Aquabox keep Citadel running.

Microsoft has also started action to help people clean up an infected computer.

Typically, it said, machines compromised by Citadel were blocked from getting security updates to ensure those computers stayed part of the botnet.

With the network disrupted, machines should be free to get updates and purge the Citadel malware from their system.

Microsoft faces a backlash from some gamers after it emerged the company may charge a fee to play pre-owned games on its new Xbox One console.

The move would also mean borrowing a game from a friend will require a payment to play, possibly the full price.

Microsoft has said gamers will be able to trade their used games online – but refused to give more details.

Microsoft’s director of programming, Larry Hryb, admitted there had been some “confusion” around the policy.

An official Xbox support account on Twitter had initially told fans that no fee would be needed for used games, but a later comment from Larry Hryb sought to clarify the situation.

He wrote on his blog: “While there have been many potential scenarios discussed, today we have only confirmed that we designed Xbox One to enable our customers to trade in and resell games at retail.

“Beyond that, we have not confirmed any specific scenarios.”

Larry Hryb added that gamers could bring their games to a friends’ house to play without paying a fee – but only if the game’s owner is signed in to the Xbox Live account with which it is registered.

If the player wanted to lend the game to that friend, a fee would be required in order to play the title on a different Xbox Live profile.

Microsoft faces a backlash from some gamers after it emerged the company may charge a fee to play pre-owned games on its new Xbox One console.

Microsoft faces a backlash from some gamers after it emerged the company may charge a fee to play pre-owned games on its new Xbox One console.

The company advises against the sharing of Xbox Live account details with other people, and only one gamer can be signed in on a single profile at any one time.

Speaking to games news website Kotaku, Microsoft’s corporate vice president, Phil Harrison, said the company would soon announce further plans for pre-owned games.

“We will have a solution – we’re not talking about it today – for you to be able to trade your previously played games online,” he said.

The move will mean Microsoft is able to gain control of what is a massively profitable market in pre-owned games across the world.

Possible models for Microsoft could include allowing gamers to relinquish their ownership of a game in order to receive discounts on new titles bought through the Xbox Live store.

This may prove popular with sports games that have yearly updates, with fans often trading in the old version to get money off the latest edition – a process that traditionally required a physical retailer that would pocket any profits on re-sales.

“This is mainly a question of control,” said Ed Barton, director of digital media at research firm Strategy Analytics.

“The margin on second-hand games is enormous, and the games industry has always been a little bit annoyed that it’s a few retailers that dominate the market for games.”

The move could have a damaging effect on shops who rely on pre-owned sales not only to turn profit in their own right, but to also spur sales of new titles.

“The retailers could quite fairly say that around 70% of the value of pre-owned games is subsequently spent on new games,” Ed Barton added.

“There’s a fair point that the trade-in business is pretty significant in driving new games sales. It remains to be seen whether that process will still continue.”

Sony, which will show off the PlayStation 4 at next month’s E3 event in Los Angeles, has remained fairly tight-lipped on their plans for dealing with pre-owned games.

Its worldwide studios president, Shuhei Yoshida, told news site Eurogamer used games would not be “blocked” on the console, but would not specify whether there would be a fee for using pre-owned titles.

Ed Barton said Sony could use the situation to gain a considerable competitive advantage over its rival.

“If Sony doesn’t follow suit, I think for a reasonable proportion of the gaming market, this will be a big plus for the PlayStation console.”

Also keeping a close eye on the pre-owned debate will be games developers and publishers, who may be able to boost their earnings through Microsoft’s plans.

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Microsoft has unveiled its next-generation console, the Xbox One, which will go on sale later this year.

Xbox One was shown off alongside a new Kinect sensor and a redesigned gamepad.

Microsoft described the voice and gesture-controlled machine as an “all-in-one” system offering games, live TV, movies and music.

The firm’s Entertainment and Devices Division accounted for $9.6 billion worth of sales in Microsoft’s last financial year.

That only represented about 13% of its total revenue for the period – but one analyst said the importance of this launch should not be underestimated.

“Microsoft is very strong in business software and the enterprise cloud business, but its consumer businesses are facing tremendous challenges: PCs are declining rapidly and Windows Phone handsets have only a fraction of the market shares of rivals,” said Jia Wu from consultants Strategy Analytics.

“Xbox represents Microsoft’s core strategy in the consumer entertainment market, especially after it sold its Mediaroom video distribution business to Ericsson earlier this year.

“This is also the unique asset which Microsoft has that can differentiate itself from Apple, Google and several of the other large tech companies.”

Microsoft’s decision to show off its new hardware in the opening minutes of its presentation sharply contrasted with Sony’s PlayStation 4 press conference in February when the Japanese company decided not to reveal the look of its machine – a move that was mocked by some commentators.

Despite earlier speculation, Microsoft’s machine does not require an always-on internet connection and will run second-hand games – the firm said it would provide more details about this “in the coming weeks”.

The Xbox One sees Microsoft add a Blu-ray drive and Skype functionality to its console, incorporate vibrating feedback into its gamepad’s triggers, and upgrade the Kinect camera’s sensor to 1080p high definition resolution.

It said the new Kinect would be better at analyzing body movements, allowing users to more accurately control games characters and navigate other entertainment options.

“When you’re exercising, it can read your heartbeat,” claimed the firm.

New tools will also allow users to record and edit gameplay so clips can be easily uploaded to the web.

EA Sports was first to announce new titles for the machine revealing FIFA 14, Madden NFL 25, NBA Live 14 and the fighting game UFC would all launch on the platform within the next 12 months using a new games engine called Ignite.

Microsoft has unveiled its next-generation console, the Xbox One, which will go on sale later this year

Microsoft has unveiled its next-generation console, the Xbox One, which will go on sale later this year

It said the new machine allowed it to carry out four times as many calculations a second as the Xbox 360 and 10 times more “animation depth and detail”.

Microsoft Studios also revealed that Forza Motorsports 5 – the latest in its own racing car franchise – would be available when the console launched.

The division added that it planned to release 15 games within the console’s first year, eight of which would be new franchises.

Activision also provided a first look at the next title in its Call of Duty series – Ghosts. It will use a new games engine to take advantage of the Xbox One’s improved graphics capabilities, offering more detailed textures for human skin and other features. The title will also be released on rival platforms.

French publisher Ubisoft was not part of the launch, but took the opportunity to announce that two games in development – Watch Dogs and Assassin’s Creed IV Black Flag – would be available for the Xbox One before the end of 2013.

The company’s chief executive, Yves Guillemot, said he was excited by the opportunities offered by the machine’s improved specifications.

“We believe it will reinvigorate the industry,” he said.

“There’s a huge step up in graphics and there’s a big step up in terms of memory as well.

“It will take time to take full advantage of the machines because we’ll have to learn how to best optimize the technology – but even from the beginning you will see a huge difference between a game on the two different generations.”

Much of the presentation was dedicated to the console’s non-gaming features including its ability to make video calls; trigger live TV and online movies by voice command; and run several programs simultaneously without any apparent drop-off in performance.

Time was also given to promote an upcoming live-action television series based on Microsoft’s Halo games franchise which movie director Steven Spielberg is working on. The firm said tie-in interactive content would be offered exclusively to the Xbox One.

“Where Nintendo’s approach to next-gen gaming seems to ignore the need to share time with television and other forms of entertainment, and Sony’s approach seems willing to share the space, Microsoft’s vision is to so blur the line between different forms of entertainment that switching from game to television or movie watching will be as simply as flipping between television channels,” said Brian Crecente, news editor at games site Polygon.

“More importantly, it is lining up to make its system the one through which all entertainment happens. If it manages to pull it off, the Xbox One could become the one jumping off point for all forms of entertainment.”

News of a five-year deal with the US’s National Football League – which will allow sports fans to call up statistics, video replays and information about what live events mean for their fantasy teams – may also appeal to Microsoft’s domestic audience.

However, it did not discuss whether it was pursuing similar tie-ups for consumers overseas.

Microsoft is planning to launch its new console at a time when many video games makers are trying to reduce costs.

Electronic Arts, Square Enix and Activision Blizzard are among firms which have announced layoffs over the past couple of months.

But the updated machines may put the companies under fresh strain.

Games engine developer Epic has warned that if studios want to take full advantage of the advances in graphics power that will be available, then their design costs could be double what they were when the Xbox 360 and PS3 launched.

“The additional rendering capabilities of these consoles will demand larger budgets for the marquee high-end games,” said Lewis Ward, video games analyst at tech research firm IDC.

“That creates a risky proposition for developers.

“But the costs are going to be mitigated to an extent – studios have said it will be easier to make games on next-gen platforms because they’re going to be closer to the development environments that are common on the PC side.”

Lewis Ward was referring to the fact that Microsoft has decided to power its machine with an eight-core x86-based CPU (central processing unit) made by AMD rather than continue with IBM’s PowerPC technology. The move means its console will run off a chip that is similar to those found in most PCs.

Sony has also opted to switch from its proprietary Cell processor tech to the x86 architecture meaning, in theory, it should be easier to port a title across different platforms.

However, the move means neither of the two new consoles will be backwards compatible with the former generation’s catalogue of games.

Both Microsoft and Sony plan follow-up “keynote” announcements at the E3 trade show in Los Angeles on June 10.

Nintendo launched its next-generation console, the Wii U, last year and has said it will not host a major press conference at the event.

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Google and Microsoft have both reported rising profits for the first quarter of 2013.

Google’s net profit climbed to $3.35 billion in Q1 2013, up 16% from a year ago, boosted by online advertising revenue.

Microsoft said it made $6 billion in profit during the same period, a jump of more than 17% from a year earlier.

The tech giant’s earnings, which beat market forecasts, came despite a lukewarm reception for Windows 8 and a decline in global PC sales during the period.

Meanwhile IBM reported a fall in Q1 2013 profits and revenues after the technology services company failed to complete deals in time and was hit by the depreciation of the Japanese yen.

Analysts said that Microsoft’s profits were boosted in part by changing the way it sold its products to corporate clients, as well as cost-cutting measures.

Google and Microsoft have both reported rising profits for the first quarter of 2013

Google and Microsoft have both reported rising profits for the first quarter of 2013

“Microsoft has successfully transitioned into an enterprise software company and these results show that,” said Kim Caughey Forrest, a senior analyst at Fort Pitt Capital.

“The strength of server and tools, and the actual way they sell licences to business, is making up for the missing PC sales.

“The margins are fantastic and the online services division seems to lose less money each quarter,” she added.

Meanwhile Google’s profits were driven up by growing income from online advertising, which helped boost overall revenues to nearly $14 billion for Q1 2013. That is up from $10.7 billion during the same period last year.

The results also suggested that Google may be beginning to build confidence with advertisers. The amount paid per advert is still declining, but at a slower rate than last year.

Despite the stronger-than-expected numbers, Microsoft announced that its CFO, Peter Klien, would be leaving the firm at the end of June.

Peter Klein, who has been with Microsoft for 11 years, is the latest in a series of executives to leave the company.

His departure comes just months after the Steven Sinofsky, the head of Windows division, quit Microsoft.

The departures of the two senior figures have come as there have been questions over the leadership of chief executive Steve Ballmer.

These doubts have been driven in part by slowing growth, and amid concerns that Microsoft had not been able to make a significant impact in the new and fast-growing sectors such as the smartphone and tablet PC markets.

The leading smartphone and tablet PC makers, such as Samsung and Apple, rely more on operating systems such as Android and iOS, rather than Microsoft’s Windows, which has enjoyed a dominance in the traditional PC market.

The fear for Microsoft is that as more people use smartphones and tablet PCs to access the internet, it may see its market share decline.

These concerns have grown after Windows 8, which is designed to make PCs work more like tablet computers, was greeted with mixed reviews at its launch last October.

More positively, analysts said that Peter Klien’s departure from the firm suggested that an imminent departure of chief executive Steve Ballmer was unlikely.

“The CFO departure is a little bit troubling. We’ve had a lot of executives leaving Microsoft recently,” said Brendan Barnicle, an analyst with Pacific Crest Securities.

“This also makes a departure by Steve Ballmer less likely. It would be very unusual to have a CEO leave soon after a CFO departure.”

Also on Thursday, IBM reported first quarter earnings of $3 billion, down 1% from a year earlier, with revenues falling 5% to $23.41 billion – lower than analysts’ expectations.

IBM said its results had been hit by delays in completing deals, with about $400 million worth of contracts that were expected to be counted in the first quarter of the year now being moved into the second.

In addition, the company said that the recent weakening of the yen had affected its earnings. The depreciation of the yen means that it earns fewer dollars from sales in Japan.

“Despite a solid start and good client demand, we did not close a number of software and mainframe transactions that have moved into the second quarter,” said IBM’s chief executive, Ginni Rometty.

“The services business performed as expected with strong profit growth and significant new business in the quarter.”

IBM’s CFO Mark Loughridge said it was “hard to measure” whether the recent series of US budget cuts – the sequester – had affected the firm.

“I can tell you that our US federal business was down 13%, which was certainly a drag on the US performance,” he said.

Microsoft has been fined 561 million euros ($731 million) for failing to promote a range of web browsers, rather than just Internet Explorer program, to users in the European Union.

It introduced a Browser Choice Screen pop-up in March 2010 as part of a settlement following an earlier EU competition investigation.

But Microsoft dropped the feature in a Windows 7 update in February 2011.

Microsoft said the omission had been the result of a “technical error”.

But competition commissioner Joaquin Almunia said the action was unprecedented, adding he wanted to deter any company from the “temptation” of reneging on such a promise.

In theory the watchdog could have fined the firm 10% of its global annual revenue, which would have totaled $7.4 billion based on its 2012 report.

“We take full responsibility for the technical error that caused this problem and have apologized for it,” a spokesman for Microsoft said following the announcement.

“We provided the Commission with a complete and candid assessment of the situation, and we have taken steps to strengthen our software development and other processes to help avoid this mistake – or anything similar – in the future.”

One lawyer said the ruling was also intended to send out a message to others.

“The European Commission is sending a firm signal in this first case of its type that it will not tolerate failure by a company to comply with the commitments it gave to settle an antitrust infringement procedure,” said Tony Woodgate from Simmons & Simmons.

“These <<commitments decisions>> are currently the European Commission’s favored mechanism to close abuse of dominance proceedings, saving enforcement resource and allowing for a speedy resolution.”

Microsoft has been fined 561 million euros for failing to promote a range of web browsers, rather than just Internet Explorer program, to users in the EU

Microsoft has been fined 561 million euros for failing to promote a range of web browsers, rather than just Internet Explorer program, to users in the EU

The case dates back to 2007 when Opera – a Norwegian web-browser maker – complained Microsoft was stifling competition on PCs by bundling Internet Explorer with its operating system.

Microsoft initially argued that the move benefited users, but after the European Commission issued a preliminary report suggesting the firm had abused its position, the company agreed to offer a choice of browser until at least 2014 to avoid risking a fine.

However, this option was missing from its Windows 7 Service Pack 1 released in 2011 and it continued to be absent for 14 months.

During that time, Microsoft reported it was still complying with the agreement.

After the EU was alerted to the problem, it contacted Microsoft, which subsequently issued an apology suggesting its engineers had accidentally missed the issue.

It also acted to restore the facility. But the move was not enough to prevent an eight-month follow-up investigation by the commission into what punishment was needed.

At a press conference in Brussels, Joaquin Almunia said Microsoft’s lack of compliance represented a “serious breach” and was the first time a firm had failed to meet such a commitment.

He explained that he preferred negotiated settlements, rather than extended legal battles, when tackling competition complaints in the fast moving IT sector.

But he added that Microsoft’s willingness to co-operate with the EU’s subsequent investigation had acted as a mitigating factor when determining the level of the fine.

“I hope this will make companies think twice before they ever thinking of breaching their international obligations,” said the commissioner.

Microsoft’s chief executive Steve Ballmer and the former head of its Windows division Steven Sinofsky have already had their most recent bonuses docked, in part because of the browser affair.

Microsoft has become the latest technology company to confirm that it has been targeted by computer hackers.

In a blog post, Microsoft announced that “a small number” of its computers had recently been deliberately infected with malicious software.

The firm said it found no evidence that any customer data had been accessed, but an investigation is continuing.

On Tuesday Apple said its computers were attacked by the same hackers who targeted Facebook a week earlier.

At the time, Facebook said it had traced a cyber attack back to China which had infiltrated employees’ laptops.

In Friday’s blog post, Microsoft spokesman Matt Thomlinson said: “This type of cyberattack is no surprise to Microsoft and other companies that must grapple with determined and persistent adversaries.”

Microsoft has become the latest technology company to confirm that it has been targeted by computer hackers

Microsoft has become the latest technology company to confirm that it has been targeted by computer hackers

Microsoft is under fresh pressure to disclose information about how confidential its Skype user data is.

Reporters Without Borders, the Electronic Frontier Foundation and 43 other campaign groups have signed a letter asking Microsoft to reveal details about what information is stored and government efforts to access it.

Google, Twitter and others already provide such transparency reports.

Microsoft is to consider the request.

“We are reviewing the letter,” a spokeswoman said.

“Microsoft has an ongoing commitment to collaborate with advocates, industry partners and 2,112 governments worldwide to develop solutions and promote effective public policies that help protect people’s online safety and privacy.”

More than 600 million people use Skype to make voice and video calls and send text and audio messages. Microsoft is currently in the process of migrating users from its Windows Live Messenger product to the service.

The US firm took control of Skype in 2011. Since then, the letter alleges, it has issued “persistently unclear and confusing” details about how confidential conversations on the service were.

Among the details the campaign groups want Microsoft to provide are:

  • Details of how many requests for data each country’s government has made and the percentage that the firm complies with.
  • Information about exactly what information Microsoft keeps itself.
  • The firm’s own analysis about the current ability of third-parties to intercept conversations.
  • The policy its staff has for dealing with disclosure requests.
Microsoft is under fresh pressure to disclose information about how confidential its Skype user data is

Microsoft is under fresh pressure to disclose information about how confidential its Skype user data is

Skype last commented in detail about privacy issues in a blog post last July.

It said that Skype-to-Skype calls between two participants did not flow through its data centres meaning it would not have access to the video or audio.

It also noted that calls made between two devices using its software would be encrypted – limiting the ability of anyone to make sense of the data even if they could listen in.

However, Microsoft acknowledged that group calls using more than two computers did pass through its servers which were used to “aggregate the media streams”, and that text-based messages were also stored on its computers for up to 30 days in order to make sure they were synchronized across users’ various devices.

“If a law enforcement entity follows the appropriate procedures and we are asked to access messages stored temporarily on our servers, we will do so,” it added.

Microsoft also noted that calls which linked Skype to mobile or landline telephone networks would flow through the relevant networks’ equipment, potentially offering an opportunity to tap in.

Furthermore it recognized that a China-only version of its service involved certain chats being stored and uploaded to the local authorities in compliance with the country’s laws.

Beyond China, several governments have signaled they want to have access to Skype data.

The UK’s draft Communications Data Bill suggests internet service providers retain information about their subscribers use of Skype and other internet communications tools.

The Cnet news site reported last year that the FBI had drafted an amendment to US law which would require Microsoft and other net chat tool providers to create surveillance backdoors in their products.

More recently the netzpolitik.org blog published what it said was a leaked document from Germany’s government stating that its Federal Criminal Police Office was working on surveillance software to allow it to track Skype and other data communications. It said the agency hoped to have it ready by 2014.

An expenditure report by the country’s Ministry of Home Affairs suggests the local authorities have already spent money to try to monitor Skype using third-party software.

Microsoft has announced it intends to “retire” its instant message chat tool Windows Live Messenger (WLM) and replace it with Skype’s messaging tool.

The news comes 18 months after the software giant announced it was paying $8.5 billion for the communications software developer.

Microsoft said WLM would be turned off by March 2013 worldwide, with the exception of China.

It reflects the firm’s determination to focus its efforts on Skype.

WLM launched in 1999 when it was known as MSN Messenger. Over time, photo delivery, video calls and games were added to the package’s text-based messages.

In 2009, the firm said it had 330 million active users.

According to internet analysis firm Comscore, WLM still had more than double the number of Skype’s instant messenger facility at the start of this year and was second only in popularity to Yahoo Messenger.

But the report suggested WLM’s US audience had fallen to 8.3 million unique users, representing a 48% drop year-on-year. By contrast, the number of people using Skype to instant message each other grew over the period.

Microsoft intends to close its instant message chat tool Windows Live Messenger and replaces it with Skype's messaging tool

Microsoft intends to close its instant message chat tool Windows Live Messenger and replaces it with Skype’s messaging tool

“When a company has competing products that can result in cannibalization it’s often better to focus on a single one,” said Brian Blau from the consultancy Gartner.

“Skype’s top-up services offer the chance to monetize its users and Microsoft is also looking towards opportunities in the living room.

“Messenger doesn’t seem like an appropriate communications platform for TVs or the firm’s Xbox console – but Skype does.”

He also noted that the firm had opted to integrate Skype into its new Windows Phone 8 smartphone software, eclipsing the effort to integrate WLM into the message threads of the operating system’ previous version.

To ease the changeover, Microsoft is offering a tool to migrate WLM messenger contacts over.

The risk is that the move encourages users to switch instead to rival platforms such as WhatsApp Messenger, AIM or Google Talk.

But Microsoft is at least partially protected by its tie-up with Facebook last year. Skype video calls are now offered as an extra to the social network’s own instant messaging tool.

 

Microsoft has formally launched the Windows Phone 8 operating system in a bid to reclaim smartphone market share.

It boasted that the system’s internet browser, Internet Explorer 10, was the fastest on any mobile, and also suggested it offered the closest integration with video chat app Skype.

Microsoft had a 3.1% share of the handset system market in the April-to-June quarter, according to IDC.

The low figure has discouraged some developers from building apps for it.

HTC, Nokia and Samsung have all unveiled flagship WP8 devices over recent months, but had been unable to release them while they waited for Microsoft to sign off its software.

The handsets will now go on sale in Europe at the weekend and rollout worldwide during November.

“It can’t be underestimated how important it is to Microsoft to get a successful handheld platform,” said Ben Wood, director of research at CCS Insight.

“It’s the fastest growing and most prolific sector – 800 million smartphones will be sold this year, within three years that number will be up to one billion annually. Nokia has also bet the ranch on this at a time when the market is dominated by Apple and Google’s systems – and Microsoft is seen as being late to the party.”

WP8 resembles the Windows 8 PC operating system released last week. Users navigate the interface by swiping through tiles which also display information pulled from the internet – for example weather conditions, Facebook status updates or recently received emails.

While its predecessor WP7.5 was based on the firm’s ageing Windows Mobile platform, WP8 shares its kernel – or software core – with its PC equivalent, which should help make it easier to port programs between the two environments.

Microsoft has formally launched the Windows Phone 8 operating system

Microsoft has formally launched the Windows Phone 8 operating system

Much of the details of WP8 were announced at a previous event in June. But Microsoft had held a few features back until the San Francisco launch.

These included the speed of Internet Explorer 10 which it said was up to seven times faster than the version on WP7.5 at handling webpages based on the commonly used Javascript language. In addition it has been designed to make use of devices’ graphics processing units (GPUs) to render videos or animations written in the HTML5 computer language.

The firm also showed off Kid’s Corner – a function designed for parents who give their handsets to their children to play with. It allows them to restrict access to a limited number of apps without giving access to email, phone call or text message functions.

Microsoft said a survey had suggested about two-thirds of smartphone-owning parents in the US had used the handsets to occupy their children while out shopping, visiting friends or some other activity.

Another new feature is Rooms which allows users to create an invitation-only environment in which members share their calendars, notes, photos and other material. The firm suggested it might be used to help families, sports teams and other community groups stay “in sync”.

Microsoft also made much of an “always-on” Skype experience.

This addresses one of the major flaws with its previous mobile system which had not allowed the video chat program to run in the background. That had meant that users of iOS and Android phones had been able to receive calls while using other apps, but WP7.5 devices had not – a notable omission bearing in mind Microsoft paid $8.5 billion to buy Skype in 2011.

On WP8 Skype runs in the background even if the app is closed and the phone locked. It uses a similar method introduced in the full Windows 8 system to reduce its battery use by effectively being “asleep” until an incoming notification of a call wakes up the program.

Microsoft stressed the facility would also be available to other video chap apps including Tango and Qik so that its own program would not be given an unfair advantage.

Despite the new features some analysts believe Microsoft could have an uphill struggle to lure customers away from Google’s market-leading platform Android, and iOS which powers Apple’s iPhones.

“Windows Phone as a platform still has very low awareness among consumers, and that’s the biggest challenge,” said Francisco Jeronimo, mobile devices research manager at the consultants IDC.

“Apple still has a strong brand thanks to the advantage it gained by offering the best smartphone experience of its kind in 2007 with the launch of the iPhone. Android benefits from the fact it powers about 147 devices on the market in Western Europe.

“There are only about 8 to 10 handsets running Windows Phone and that makes it hard for it to stand out. It won’t be until we see 20 to 30 devices and people relate it to the desktop system that consumers understand there is something going on.”

WP8 runs software written for previous versions of the system. But Stuart Miles, founder of the gadget site Pocket-lint, said some consumers might be put off by the fact some apps remained unavailable.

“Windows Phone 8 will encourage the release of more software, and some of the apps that are already there work well – but the problem is that I’ve been to several launches where the developers say that a release for the system is on their roadmap but is not a priority.

“So if you are a die-hard app fan you may be disappointed, but if you don’t care so much about the latest third-party software then it is worth looking at.”

Microsoft said they have 46 of the top 50 apps on the platform so far.

“That’s huge progress for us,” said Joe Belfiore, manager of the Windows Phone program.

 

Microsoft has started shipping its first Surface tablet computers ahead of their official launch on October 26th.

According to Microsoft site, it has sold out of pre-orders for the 32GB version of the device, which runs the RT version of Windows 8.

It marks Microsoft’s entry into the PC hardware market, posing competition to other computer manufacturers.

Early reviews of the device have been mixed, praising the hardware but criticizing a lack of software.

Surface with Windows RT – to give the device its full name – runs on a chip made by Nvidia, based on the designs of British company Arm Holdings.

It is designed to be cheaper and offer longer battery life than products using x86 chips that run the full Windows 8 system.

The caveat is that Windows RT devices can only install third-party software from Microsoft’s own Windows Store.

Although they do offer a traditional desktop mode, the only programs that can be run under it are Microsoft’s Office 2013 suite and a limited number of the firm’s other products.

Until more third-party apps are developed for the touch-interface mode, users face a significantly smaller selection of software than they would on traditional Windows devices and tablets powered by Apple’s iOS or Google’s Android operating systems.

Microsoft intends to launch an Intel-based version of the Surface offering the full Windows 8 system in January.

But it does appear there is demand for the Windows RT.

Although Microsoft has not disclosed sales figures, it said that pre-orders of the 32GB version of the tablet – which costs $600 – had “temporarily sold out” in the US, Canada, France, Germany and the UK within a day of going on sale.

An $860 64GB version bundled with a Touch Cover keyboard remains on offer.

Reviewers have given a mixed reaction to the machine.

“This is one of the most of exciting pieces of hardware I’ve ever used,” enthused Wired’s Matthew Honan.

“It is extremely well-designed; meticulous even.”

He praised the ability to type quickly on the machine’s Type Cover – the $150 add-on that doubles as a keyboard and screen protector, offering an alternative to on-screen typing.

However, he criticized its cameras as “junk” and highlighted the lack of software.

“I missed apps like Dropbox and 1Password and Rdio,” he wrote.

Microsoft has started shipping its first Surface tablet computers ahead of their official launch on October 26th

Microsoft has started shipping its first Surface tablet computers ahead of their official launch on October 26th

The Wall Street Journal’s Walt Mossberg also commended the machine’s physical aspects.

“It’s a unique tablet, made of a type of magnesium with a feeling of quality and care,” he wrote.

However, he criticized its battery life, and highlighted problems with the third-party apps that were available.

“Evernote took a long time to synchronize my account, and the Kindle app had to stop every few pages to fetch the next section.”

The Verge’s Joshua Topolsky also complained some games felt “sluggish” on the machine, however he said Microsoft’s own Internet Explorer browser and Xbox Music apps showed “how playful and fresh this version of Windows can be”.

But Techcrunch’s Matt Burns decided that he could not recommend consumers buy the tablet in its current state, complaining that its 10.6 in (26.9 cm) size made it unwieldy.

“With its awkward size and incomplete operating system, the Surface fails to excel at anything particular in the way other tablets have,” he wrote.

However, he said it could offer an alternative to existing low-end laptops if Microsoft could attract more software developers.

“If properly nurtured, Windows RT and the Surface RT could be something worthwhile,” he said.

Microsoft’s chief executive Steve Ballmer may unveil more apps when he hosts an event to show off the tablets alongside the various versions of Windows 8 on Thursday in New York.

The devices and software will go on sale the next day.

Microsoft will face competition from Dell, Asus, Lenovo and Samsung, who have also unveiled Windows RT devices over recent weeks.

Apple is also attempting to woo consumers with its new iPad mini and revised fourth generation full-sized iPad, and Amazon has just launched its Android-powered Kindle Fire tablet family in the UK.

Google is also expected to unveil further Android tablets built by other manufacturers at an event on Monday, adding to the Nexus 7 it has already launched alongside Asus.

“It is really hard for consumers as the portfolio of products will be huge this Christmas season,” said Francisco Jeronimo, mobile device researcher at consultants IDC.

“Microsoft is trying to promote its entire eco-system – including its own Office software and the fact it can offer integration between Windows computers, Windows Phone handsets and the Xbox games console – to gain an edge.

“But it faces a huge problem as its rivals are offering cheaper-priced devices.”

Other analysts have noted, however, that Microsoft would risk angering other Windows 8 device makers were it to copy Amazon’s strategy of selling its tablets at break-even prices.

What is launching when:

24 Oct: Samsung (New York)

Will give details of US launch of Galaxy Note 2

25 Oct: Microsoft (New York)

Launch event for Windows 8 which goes on sale, alongside Surface tablets, the next day

29 Oct: Google (New York)

Android-themed event, may include new Nexus devices

29 Oct: Microsoft (San Francisco)

Launch of Windows Phone 8 operating system

30 Oct: Arm (London)

Mobile device chip designer and “partners” announce news

 

Windows 8 will be released on October 26, Microsoft has revealed.

The declaration was made at the firm’s annual sales meeting and was published on its blog shortly after.

The firm has described the update as the most important redesign of its interface in more than a decade.

The announcement was made a day before the firm releases its fourth quarter earnings report. Analysts say it may post its first ever loss after writing down the value of a troubled takeover.

Microsoft paid $6.3 billion for the online advertising service Aquantive in 2007 but has said the service did not perform as expected. As a result its earnings will be offset by a $6.2 billion charge.

Windows 8 will be released on October 26

Windows 8 will be released on October 26

Microsoft’s future efforts are now focused on its upcoming system software release.

Windows 8 includes a touch-controlled interface dubbed Metro as well as a more traditional desktop.

It will be released in a version that runs on ARM-based chips for the first time, as well as versions for x86-based ones designed by Intel and AMD.

Some consumers will have delayed buying new computers ahead of the release, depressing Microsoft’s sales in the meantime.

However, many companies have continued with their roll-out of Windows 7 as it typically takes big firms’ IT departments months or years after a major system update to approve its installation on workers’ computers.

Part of Microsoft’s goal in the initial months will be to eat into sales of rivals’ tablet computers.

Apple’s iPad and Amazon’s Kindle Fire have dominated the sector while Google’s new Nexus 7 has also attracted positive reviews.

Microsoft hopes to make the most of the fact that it can offer a single system that can power both desktop PCs and mobile devices – allowing progams to work on both – as opposed to Apple’s decision to offer different Mac OS X and iPad iOS systems.

Microsoft has also taken the out-of-character step of announcing its own hardware – the Surface family of tablets – to compete with other companies’ products on the Windows 8 platform to maximize its chances.

But since announcing the news chief executive Steve Ballmer has sought to reassure his company’s hardware partners, describing Surface as “a design point” that would have a place within a “broad Windows ecosystem”.

Whatever the case, investors appear hopeful despite the problems with Aquantive.

“Microsoft’s stock is up 17% since the start of the year in part because of anticipation for Windows 8 and Surface,” said Colin Gillis, senior technology analyst at BGC Partners.

“We’re also still seeing nearly one million PCs sold worldwide a day so that’s a sizeable marketplace for them.”

 

Microsoft has written down the value of online advertising firm aQuantive it bought five years ago by $6.2 billion.

Microsoft bought aQuantive for $6.3 billion in cash in an attempt to catch rival Google in the race to increase revenues from search-related advertising.

The write-down effectively wipes out the acquisition’s value, although there was little impact on Microsoft’s shares in after-hours trading on Monday.

The purchase of aQuantive in 2007 was then Microsoft’s biggest acquisition.

It has since been eclipsed by the company’s $8.5 billion purchase of internet phone service Skype last year.

Microsoft has written down the value of online advertising firm aQuantive it bought five years ago by $6.2 billion

Microsoft has written down the value of online advertising firm aQuantive it bought five years ago by $6.2 billion

Microsoft said in a statement on Monday that “the acquisition did not accelerate growth to the degree anticipated, contributing to the write-down”.

Analysts said the write-down came as no surprise to investors.

“aQuantive didn’t work out, but everyone already pretty much knew that,” said Colin Gillis at BGP Financial Partners.

“Now, they are just mopping up.”

The $6.2 billion charge is likely to wipe out any profit for the company’s fourth quarter. Wall Street was expecting Microsoft to report fourth-quarter net profit of about $5.25 billion on 19 July.

In addition to the write-down, Microsoft said its forecast for future growth and profitability at its online services arm – which includes the Bing search engine and MSN internet portal – were “lower than previous estimates”.

 

Microsoft confirms it has bought the office social network site Yammer for $1.2 billion.

The business, which is four years old and has five million users, operates like Facebook for communication within companies.

There had been reports the two were talking about a deal but Microsoft only confirmed the plan on Monday.

Yammer is used by firms including the motor giant Ford and the business services firm Deloitte.

Microsoft confirms it has bought the office social network site Yammer for $1.2 billion

Microsoft confirms it has bought the office social network site Yammer for $1.2 billion

Microsoft hopes the acquisition will make its range of software products more appealing.

Last year it bought the communications business Skype and is integrating it into its products, including its Office software which contributed 60% of its profits last year.

Yammer plans to continue to offer its service in the way it does currently.

Yammer’s chief executive David Sacks said: “When we started Yammer four years ago, we set out to do something big.

“We had a vision for how social networking could change the way we work. Joining Microsoft will accelerate that vision and give us access to the technologies, expertise and resources we’ll need to scale and innovate.”

 

Microsoft has unveiled Surface, its own-brand family of tablets, which will be powered by its upcoming Windows 8 system and contains a choice of an Intel or ARM-based processor.

It allows Microsoft to challenge Apple’s bestselling iPad with a device that can run standard applications such as its own Office programs and Photoshop.

But it puts Microsoft in competition with other manufacturers planning to release tablets designed for Windows 8.

The company’s chief executive, Steve Ballmer, said he had wanted to give the software “its own companion hardware”.

The devices have 10.6 inch (26.9 cm) displays, built-in kickstands and are housed in magnesium cases – which the company described as the first of their kind.

Microsoft has unveiled Surface, its own-brand family of tablets, which will be powered by its upcoming Windows 8 system and contains a choice of an Intel or ARM-based processor

Microsoft has unveiled Surface, its own-brand family of tablets, which will be powered by its upcoming Windows 8 system and contains a choice of an Intel or ARM-based processor

The ARM-based tablets are 9.3 mm (0.4 inches) thick – slightly less than the iPad – and run the Windows RT version of the new system. The Verge reported that the chipset will be built by Nvidia.

The versions using Intel’s x86 technology run Windows 8 Pro and are 13.5 mm (0.5 inches) thick.

The specifications mean the Surface tablets have bigger screens than the iPad but are heavier.

A variety of accompanying covers can be attached using built-in magnets. They double as keyboards with trackpads. One version is flat while the other offers keys that can be depressed.

The devices are also designed to work with a pen accessory using what the firm dubbed “digital ink”. When the stylus is held close to the screen of the tablet it ignores touch-input from the users’ hands and “samples” the ink at 600 dpi (dots per inch).

The ARM-based version will be available with either 32 GB (gigabytes) or 64 GB of storage. Microsoft said they would be priced at a similar rate to other tablets using the same type of processor built by other firms.

It added that the Intel-based versions would be offered with either 64 GB or 128 GB of storage and would have price tags comparable to ultrabook laptops.

The firm’s designs have already proved popular with smartphone makers, but Microsoft’s support for its technology in Windows 8 offers it the potential to expand into a market dominated until now by Intel and AMD.

“This represents a significant milestone in Microsoft’s journey to expand the support of the Windows operating system and embrace the ARM architecture,” said Lance Howarth, the firm’s vice president of marketing.

“With the Surface for Windows RT announcement we are delighted to see yet another example of this partnership in action which follows on from various Windows RT devices demonstrated at Taiwan’s Computex show recently.”

 

Microsoft launches the most complete preview yet of its upcoming Windows 8 operating system.

Microsoft said that tens of thousands of improvements have been made to what it calls the most important redesign of its interface since Windows 95.

Consumers can now download the release preview of Windows 8, a system which Microsoft says is its most tested operating system ever.

It is expected to go on sale in the autumn, three years after Windows 7.

Microsoft launches the most complete preview yet of its upcoming Windows 8 operating system

Microsoft launches the most complete preview yet of its upcoming Windows 8 operating system

The new operating system is designed to bring Windows into the touchscreen, smartphone era.

It adopts the Metro interface of the company’s mobile operating system, Windows Phone 7.

Windows, which still dominates the desktop PC software market, has been much slower to make an impact on mobile phones and tablet computers.

The release preview has features not available in the last version, the consumer preview, launched in February.

There will be new apps for the Bing search engine, news and sports, and improvements to the mail and photo applications unveiled previously.

The latest version of Microsoft’s browser Internet Explorer 10, optimized for touchscreen, is also included for the first time. Users are promised greater personalisation of the start screen, and more control over privacy.

Internet Explorer 10 will be the first browser with “do not track” turned on by default, meaning users can easily decide not to accept cookies.

Microsoft said manufacturers and developers are at work on new devices and apps designed to make the most of Windows 8’s features.

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Motorola Mobility has been granted an injunction against the distribution of key Microsoft products, Xbox 360 games console, Windows 7 system software, Internet Explorer and Windows Media Player, in Germany.

The court’s decision follows a ruling that Microsoft had infringed two patents necessary to offer H.264 video coding and playback.

A US court has banned Motorola from enforcing the action until it considers the matter next week.

The handset maker is in the process of being taken over by Google.

This is just one of several cases involving about 50 intellectual properties that the smartphone maker has claimed that Microsoft should have licensed.

Motorola Mobility has been granted an injunction against the distribution of Xbox 360 games console in Germany

Motorola Mobility has been granted an injunction against the distribution of Xbox 360 games console in Germany

Microsoft has said that if it met all of Motorola’s demands it would face an annual bill of $4 billion. Motorola disputes the figure.

A statement from Motorola said: “We are pleased that the Mannheim Court found that Microsoft products infringe Motorola Mobility’s intellectual property. As a path forward, we remain open to resolving this matter. Fair compensation is all that we have been seeking for our intellectual property.”

Microsoft said it planned to appeal the German ruling.

“This is one step in a long process, and we are confident that Motorola will eventually be held to its promise to make its standard essential patents available on fair and reasonable terms for the benefit of consumers who enjoy video on the web,” a spokesman said.

“Motorola is prohibited from acting on today’s decision, and our business in Germany will continue as usual while we appeal this decision and pursue the fundamental issue of Motorola’s broken promise.”

Microsoft moved its European software distribution centre from Germany to the Netherlands last month ahead of the verdict to minimize potential disruption.

However, Motorola cannot enforce the ruling until a Seattle-based judge lifts a restraining order.

The restriction was put in place after Microsoft claimed that Motorola was abusing its Frand-commitments – a promise to license innovations deemed critical to widely-used technologies under “fair, reasonable and non-discriminatory” terms.

A hearing is scheduled for 7 May, although the judge may issue his ruling at a later date.

The German case is also likely to be considered by the European Commission.

It is carrying out two probes into whether Motorola’s Frand-type patent activities amount to “an abuse of a dominant market position”.

 

Microsoft has announced that its next operating system Windows 8 will come in just three different flavors.

For those with Intel-compatible machines, the OS will be available in two versions – Windows 8 and Windows 8 Pro.

And for those with devices, largely tablets, powered by ARM-designed chips there will be a Windows RT version.

Microsoft wants to simplify how it markets Windows 8, which is expected to launch in autumn 2012.

The complex flavors of past Windows – from basic to home, premium to ultimate – have become something of a joke among tech experts.

Microsoft has called Windows 8 the most significant redesign of the Windows interface since its groundbreaking Windows 95 OS.

Windows 8 and Windows 8 Pro will be available for Intel-compatible machines and Windows RT for tablets

Windows 8 and Windows 8 Pro will be available for Intel-compatible machines and Windows RT for tablets

The ARM version of the OS is the newest edition and reflects Microsoft’s desire to unify the engine known for running desktop computers with that for tablets and smartphones. Windows RT will sit alongside Apple’s iOS and Google’s Android operating systems.

It announced the new flavors on its Windows blog.

Many of those reacting to the announcement were unimpressed by the name for its ARM version.

“You guys are doing a phenomenal job with Windows Phone, Windows 8, etc, which makes the naming of <<Windows RT>> all the more maddening. You’re trying to simplify the rest of the <<Windows Live>> properties, which I applaud, but then you go with Windows RT? Does. not. compute,” said Michael Jenke, summing up the views of many responses to the blog.

In an earlier 8,600-plus word blog post Windows president Steven Sinofsky detailed the “energizing and daunting” challenges in developing Windows on ARM.

A preview version of Windows 8 launched late last year and more than 100,000 changes had been made since the developer version went public.

For the first time since its inception, the trademark Windows “Start” button will no longer appear – instead being replaced by a sliding panel-based menu.

In a footnote in its blog, Microsoft said that there would be an adapted version of Windows 8 Pro for businesses.