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The next release of Windows will be able to run on chips usually found in mobile phones.

A desktop version of Windows 7 was shown working with three processors built around designs from UK firm Arm.

The demonstration is significant because before now Windows was closely connected with Intel-designed chips.

The announcement formed part of a keynote speech by Microsoft boss Steve Ballmer that opened the Consumer Electronics Show in Las Vegas.

In his speech, Mr Ballmer said the "next version" of Windows, likely to be Windows 8, would support what he called "systems on a chip" (SOC).

These are widely used in mobiles and other portable computers and collapse the discrete chip components in desktops used to handle graphics and data into a single package. In this way they reduce the power needed to keep a device working and boost battery life.

About 80% of all mobiles, including Apple's iPhone 4, are built around SOCs made from Arm designs.

Virtual being

In recent months chip giants Intel and AMD have been working hard to turn the chips used in desktop PCs in to SOCs that can work in smaller devices.

Mr Ballmer said that the next generation of Windows would also run on new versions of these SOCs - Atom from Intel and Fusion from AMD.

Microsoft was working to get a full version of Windows running on mobile chips in a bid to end the compromises people typically have to make when using portable gadgets, said Steven Sinofsky, president of the Windows and Windows Live division during a demo held prior to Mr Ballmer's speech.

During its demonstration, Microsoft showed Windows running on Arm-designed chips made by Qualcomm, Texas Instruments and Nvidia.

Microsoft has a mobile version of Windows, known as Windows Phone 7, that already runs on Arm-designed chips. But, said Mr Sinofsky, Windows Phone 7 was aimed at smaller devices and the full version would be for larger tablets, slates and netbooks.

As well as running Windows, Microsoft also showed the work it was doing to get applications such as Word, Powerpoint and Internet Explorer plus common tasks such as printing running on Arm chips.

Mr Ballmer made no mention of when Arm-powered Windows devices would surface. However, if they coincide with the release of the next version of Windows, this would mean a launch date in 2012.

Many expect the two to come together as Windows 8, which will handle multi-touch interfaces, a feature poorly supported in the current version of Windows but which is key for slates and tablets where the chips are likely to find a use.

"Increasingly customers expect the full range of capabilities from every device they use," he said.

In his keynote, Mr Ballmer also gave CES attendees an update on its plans for its Xbox games console and Windows Phone 7.

Forthcoming updates for Windows Phone 7 would speed up response times on its handsets and introduce a copy and paste feature, said Mr Ballmer.

The Kinect add-on for the Xbox was proving very popular, he said, with more than eight million of the motion-spotting systems sold.

A future update would tie motions made by a human to what their avatar does in the social spaces of the Xbox Live gaming service, he said.

The Avatar Kinect system will let people host and attend virtual meetings and gatherings with the avatars of their friends and have their on-screen doubles act out what they are doing in real life.