Ballmer during yesterday's meeting. (Microsoft photo)

The threat posed by Apple's iPad was a central topic during Microsoft's annual meeting with financial analysts yesterday in Redmond. But analysts don't seem to have walked away convinced that Microsoft can come up with a true iPad rival.

As noted by Fortune's Philip Elmer-DeWitt this morning, Ballmer talked at length -- too much length -- about Microsoft's plans for tablet and slate computers. He made it clear, at least, that Microsoft is enthusiastic about its prospects in the market, but his comments at times required a translator to decipher. As an example, here's one exchange from the Q&A session.

Friar: ... I know you have been bombarded all day with questions about tablets and the iPad, and I still don't feel we're hearing a clear articulation of what is Microsoft's strategy to address that impact. So, is it a third way, a new operating system, that will go to that? Are you going to support our ARM architectures different? You did the ARM architectural license a few weeks back. I mean, it feels like right now you're not completely clear, which is why we're not hearing that message. Or I just want to give you another chance to maybe give a succinct, "Here's our response."

Ballmer: No, that's actually helpful. I would have said I thought we were completely clear. We're coming full guns. The operating system is called Windows. No -- there's -- let me be unambiguous. A new Windows Phone for screen sizes that, let me just say, are, you know, sort of bigger than three or four inches -- the answer is Windows Phone. We are in the game. We're all in the game today with Intel architecture machines. We've got improvements coming from Intel. We're driving forward. We're unambiguous about that. Now, where we'll go and what's going to matter -- I said also in my remarks that in no way will we allow hardware to be the impediment. We will embrace what we need to embrace over time in terms of hardware evolution.

But, you say to me are we going to see slates? Yes. What processor are they going to have? They are going to have an Intel architecture processor at least in any foreseeable future. Are they going to run Windows? Yeah. Will it be tuned? Yes! And we are going to sell like crazy. We are going to market like crazy. We have devices that will run more applications, that have as much content, that have anything you want on the planet. And we have an ecosystem of developers that know how to write applications for that thing. Believe me, as I think everybody knows, you can buy two PCs for the price of one iPad -- two netbooks today for the price of one iPad. So, people are sitting there over-celebrating (bill of materials) costs and blah, blah, blah. We and Intel can get our job done and know how to make money.

There's good money for everybody in the ecosystem to go make. I talked about power. We've got work we have to do with hardware partners, with Intel. There's certainly some work to be done there. And over time where we go is where we go. But at least in the timeframe that which anybody does these models, for example, let's go. Let's go and we'll be in market as soon as we can with new devices, whether that's, you know, really, really soon or just really pretty soon. I'm going to wait until I have the device that I want to hand you and tell you to go use, or a collection of devices. I think that would be the appropriate time to say it is time. But it ain't a long time from now. Pardon my English...

One important point of clarification: Ballmer said the Windows Phone operating system would come on screen sizes "bigger than three or four inches," but what he probably meant, based on the context, is that Windows 7 would come on screens larger than three or four inches. At the event I could see Craig Mundie, Microsoft's chief research and strategy officer, start to correct Ballmer before letting it go.

At any rate, John DiFucci from JPMorgan later followed up.

DiFucci: We all realize you have to measure time to market versus quality, and customer satisfaction issues, but Android is going to be out in the fall with a bunch of tablets. You had the iPad out there now. It is somewhat incremental, but it's also somewhat cannibalistic. You're not dealing with netbooks with a company called Ubuntu. You're dealing with Apple and Google. So, just how do you think about that, these things get out there soon and you're going to ‑‑ it sounds like you're not going to get out there until later?

Ballmer: I didn't say anything about when we're getting out there. You can draw any conclusion you like. We're not waiting for Oak Trail, I'm just highlighting. So, we've got kind of more coming from our ecosystem, not just our company. We'll come when the time is right, the goal is, I think I've repeated a few times, that would be as soon as we can, and it's not going to take a heck of a long time, but when we can show you some devices that you'd like we'll talk about that. ...

On the netbook, nor the slate, if it's two weeks one way or the other, or it's a month, I mean, let's not speculate, let's merely say when you get your Windows 7 machine, it will print. Let's just start with that. I mean some people actually like to print every now and then. Ours will print. I'm not trying to say that other guys aren't doing good work. I'm not saying that. We've got to ‑‑ come on, every day. Every day you come to work you have to prove yourself, prove yourself, prove yourself. We'll prove ourselves. ...

I relish the competition. I relish holding up those couple of machines today that I wanted to hand you. It's not today. I'll relish doing it tomorrow. Bring on ‑‑ particularly if with the application base, with the tools that we have, with the user understanding and momentum and everything going on, we can't compete with ‑‑ particularly whatever the weird collection of Android machines is going to look like, shame on us.

Apple is Apple. They're always a little tougher to compete with. They're a really good competitor, and tend to be a really high-priced competitor. People worried a little bit about our (bill of materials) costs. They've got a lot of margin in those devices, which creates a lot of room in which to operate. Okay. We've competed with Apple before. I talked about that.

We've been competing with Macs, and I notice in this audience you get one profile for the 93 percent of people almost who agree with us every day about laptops. We're going to have things that should be interesting to them. That doesn't mean it's not going to be exciting. That doesn't mean you're not going to have to pay attention to shareholders. It certainly means we've got to pay attention. But, at the end of the day kind of what makes life kind of interesting, kind of fun, and you're going to see very interesting things.

You get the idea. Friar, the Goldman Sachs analyst who asked the first question, wrote in a report to clients this morning that "a strong tablet/iPad response is still lacking, in our view." That was a particularly gentle way of putting it.

My one quibble with the Fortune post is that it leaves the impression that this style of communication from Ballmer is something new. It's not. After years of listening to the Microsoft CEO talk like this, I feel qualified to offer this translation.

Microsoft will be working with a variety of hardware partners to come out with slate-style machines running Windows 7. You'll start to see them this year, but Microsoft doesn't want to say that explicitly in case the cool ones aren't ready by then. Microsoft is particularly looking forward to the release of Intel's Oak Trail processors for these slates early next year, but it's not waiting for that.

Windows Phone is for phones.

No, these new Windows slates might not have the aura of the iPad -- but remember that Windows PCs don't have the aura of the Mac, and they dominate the market because they're lower-priced, do the job adequately and offer people a ton of variety. Microsoft and Intel know how to sell this stuff and make money. And oh, by the way, Ballmer isn't taking seriously the notion of Android on these slates.

Whether or not he was right, that's basically what Ballmer was trying to say. Maybe some of Seattle's startup gurus could work with him on an elevator pitch?

Previously: Ballmer concedes iPad progress, but vows a Microsoft comeback