Microsoft Corp Chief Executive Steve Ballmer was unperturbed a day after rival Apple Inc shot past his firm as the world's biggest tech company by market value and said his aim was to develop a good product line and earn more profits.

Microsoft, whose operating system runs on more than 90 percent of the world's personal computers, has not been able to match growth rates from its heyday in the 1990s.

Microsoft stock is down 20 percent from 10 years ago, while shares of Apple are worth more than 10 times what they were 10 years ago, as it has profited from revolutionizing consumer electronics with its stylish, easy to use products such as the iPod, iPhone and MacBook laptops.

Ballmer, on an Asian visit, told reporters in the Indian capital that Microsoft is the most profitable technology firm and a fierce competitor to anyone.

My focus is on ... what we should be doing to our product line, where do we go, how do we make products more innovative, he said in response to a question on Apple racing past it in market value.

It's a long game, we have good competitors ... we too are a very good competitor, Ballmer said. We are executing very well and that is going to lead to great products and great success.

Microsoft is betting on an updated version of its Office software it launched earlier this month and a completely new software system for phones called Windows Phone 7, which is scheduled to hit the market in a new range of handsets for the holiday shopping season.

I am optimistic, Ballmer said.

GAMES AND MOBILE PHONES UNIT

Robbie Bach, head of Microsoft's video games and mobile phones unit, is retiring in a management shuffle, as Ballmer tightens his grip over a division steadily ceding ground to rivals.

The departure of the 22-year veteran, credited with launching the Xbox in 2001, comes as Microsoft's mobile efforts are being brushed aside by Apple's iPhone and Google Inc's Android operating system in a fast-growing, but increasingly crowded smartphone market.

From July 1, the two senior vice presidents in charge of games and phones will report to Ballmer.

I won't predict some massive change, Ballmer said. I don't sort of foreshadow any change in direction. We just have to accelerate plans.

The entertainment and devices unit is the fourth-largest of Microsoft's five operating units -- behind its Windows, Office and server units -- and is on track to post more than $8 billion in revenue for the year ending June 30.

(Reporting by Devidutta Tripathy; Editing by Ranjit Gangadharan and Derek Caney)

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