Microsoft sees China, India competition in future

TEL AVIV (Reuters) - Microsoft chairman Bill Gates said on Wednesday the software giant faced growing competition from companies in China and India but, for now, the strength in those countries lies in software services.

Gates, on his first visit to Israel, said Israeli companies would also confront increased competition from China and India.

"There will be competitors for Microsoft and for Israeli companies coming out of those countries although today the success, particularly in India, has mostly been in the software services area, outsourcing work, doing call centres and things like that," Gates told a news conference.

In contrast, Israel, along with the United States, is focused on inventing new, patented products and software, he said.

"India and China will try and be in those product areas as well, but so far it's mostly been in the service-oriented activities," he said.

Gates said the technology drive in China and India would expand the global customer base for technology products.

Gates also welcomed competition from Google, the internet search company.

"They're one of our newest competitors. It's a great thing for us to have a broad range of competitors," Gates said.

"Internet search as it is today will be dramatically better in a few years whether it's us or Google, we're both going to be making dramatic improvements there."

Microsoft faces competition in about half the sectors in which it operates. In the other half -- areas such as internet television and speech recognition -- Microsoft is driving the frontier, Gates said.

The billionaire founder of Microsoft said the company was interested in writing software wherever software could add value.

"That's taken us into the car now. Think about how you can interface with mapping and communications and entertainment in the car," he said.

"It's taken us into the video-game area which is very software-driven although we have to do hardware there as well. It's taken us into the phone."

Microsoft is also seeking to develop "user centric" software platforms that enable people to move between various devices without having to manually move the information, he said.