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Microsoft CEO Steve Ballmer in January. (Microsoft photo)

Microsoft CEO Steve Ballmer is back in the news, setting tech news sites abuzz this week with the prediction that up to 500 million users — half a billion people — will be running Windows 8 by the end of next year.

It’s a bold statement about the company’s aspirations for the next version of its flagship PC operating system, which will dramatically change how people use Windows.

Except Ballmer didn’t quite say that. We were able to get our hands on this excerpt containing the remarks that prompted the flurry of coverage from Ballmer’s speech this week in South Korea.

“I think there’s also then never been a better time to be not only working with Windows, but there’s never been a better time to be in this industry.  We see a lot of activity here in Korea.  In the last three years we’ve been involved with over 600 startup companies here in Korea and we’ve worked contributing over $60 million of software to help those businesses get off the ground.  And we think it’s that kind of innovation and creativity, applied against the big opportunities, machine learning, form factors, Windows 8, new scenarios that will really power this industry.

“With something like 400 to 500 million users expected in the next year, the best economic activity for people building machines, and the best economic opportunity for people writing applications will be around Windows. And, as we’ve said, from small to medium, to large, to portable, it’s a phenomenal opportunity.”

Reading that, it’s easy to see how the AFP new service (which sparked the flurry of attention) came to the conclusion that Ballmer believes “up to 500 million users will have Windows 8 next year,” quoting from their report.

However, given the way Ballmer actually couched it, it’s going to be hard to realistically hold his feet to the fire on this one. Ballmer appeared to be referring generally to overall expectations for PC sales next year, and it’s significant that he referred to Windows in that context, not to Windows 8 specifically.

The new Windows 8 start screen

Even if 500 million PCs are sold next year, it takes time for a new operating system to ramp up and become a significant part of the market. As Michael Dell explained on his company’s earnings conference call yesterday, “corporations are still adopting Windows 7, so we don’t think there’ll be a massive adoption of Windows 8 by corporations early on.”

Computerworld’s Preston Gralla does a good job explaining why the notion of 500 million Windows 8 users by the end of next year simply isn’t realistic.

In the bigger picture, the more significant question is whether Windows 8 will mark the “rebirth” of Windows that Ballmer promises, as quoted by AFP.

The new operating system is a radical change from existing Windows versions, leaning on web-style “Metro” applications and shifting to a default Start screen that contains tiles similar to those found in Windows Phone and the restled Xbox Live interface.

The traditional desktop is still there, but based on the reaction to the early previews of Windows 8, the changes could cause some users to stay away. (See: ‘Real user’ tries Windows 8: ‘They trying to drive me to Mac?‘)

Microsoft plans to issue a “Release Preview” of Windows 8 next month. The company hasn’t yet announced a final release date for the finished version, but Windows 8 is widely expected to hit the market this fall.

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