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Slowing world economies and the knock-on effects of the September terrorist attacks in the U.S. could impact the PC business in the short term, but long-term prospects are bright, said Bill Gates, chair and chief software architect of Microsoft, speaking on Tuesday in Tokyo.

"There could be a period of time here where the kind of somberness that comes with this tragedy affects business," he said, referring to the U.S. terrorist attacks. "I'm not somebody who can predict that. However, I can say that, already as the economy was slowing down, Microsoft was one of the few companies that was able to continue to increase our R&D on products such as tablet PC, speech recognition, Xbox, or Pocket PC."

"Certainly, the tragedy of September 11 has touched everyone in our country and Microsoft employees' first thoughts were in terms of how we could help out, both with the people involved and the companies involved, in any way," he said, speaking at a news conference held to announce an alliance with NEC.

Asked about an incident in which a letter possibly infected with the anthrax virus was sent to a Microsoft office in Nevada, Gates said, "There was an incident involving Microsoft itself. Fortunately that incident didn't involve anybody being infected and obviously like all companies we are beefing up the various things we do to try and keep our employees as safe as possible."

Despite the current troubles, and pressure on the PC market from the increasing popularity of personal digital assistants and cellular telephone handsets with Internet capability, Gates remains optimistic about the future of the PC industry.

"Throughout the history of the PC, it has been underestimated again and again," he said. This is not the first year we have had people saying, 'What about the PC?' We had that happen when we had a market of 1 million PCs, when we had a market of 10 million PCs, and now the market is well above 100 million."

He cited new applications yet to be fully realized, such as real-time communications, note taking, and a music storage system, as reason for his optimism.

"The PC, as we improve it, will be the device of choice anywhere you want the large screen. The market for small-screen devices will be optimized by having these platforms work together," he added.

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