Now that the company's new leadership is in place, Microsoft is reportedly charging forward with one of the devices to which Ballmer is ostensibly referring: a smartwatch.
The product, which Microsoft has yet to confirm, would presumably fall under the purview of Julie Larson-Green, who previously co-ran Windows and is now responsible for the newly-formed Devices and Studio division. The division includes not only Surface products but also Xbox games and hardware.
According to rumors, Apple, Samsung and many others are developing similar smartwatch devices. It's assumed many of these companies will attempt to leverage existing mobile customers by pitching the devices as companions to smartphones and tablets. Compared to direct competitors, Microsoft's base of mobile users is relatively small, a potential disadvantage that Larson-Green will have to manage.
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The buzz around a Microsoft smartwatch has been building for weeks. In April, The Wall Street Journal reported that the company was sourcing components for the device, which is rumored to have a 1.5-inch touchscreen. The Verge later reported that the device might use the same power connecter as Microsoft's Surface tablets.
On July 12, the website Among Tech, citing unidentified sources, reported that Microsoft's smartwatch work has been moved from the Xbox team to the Surface team. The site claims the device will use removable wrist bands that will be available in a variety of colors, and that the main unit will be made from an aluminum that is 80% transparent but much stronger than glass. The device will reportedly support 4G LTE and rely on the cloud, but it will also include 6 GB of local storage, most of which will be devoured by the OS.
The Verge's unnamed sources subsequently confirmed that the smartwatch program is now directly under the Surface team. The site reported that a prototype has been built, and that it will run a modified version of Windows 8.