Microsoft chief executive Steve Ballmer has suggested the company could follow Apple's approach, pointing to hardware and online services as its future.

Speaking in his annual letter to shareholders, Ballmer implied the tech giant may consider building their own phones, following in the footsteps of its forthcoming Surface tablet PC and Xbox gaming console.

"There will be times when we build specific devices for specific purposes, as we have chosen to do with Xbox and the recently announced Microsoft Surface," Ballmer says.

While acknowledging Microsoft's role in the so-called "ecosystem" was changing, he confirmed the company would continue working with hardware partners Dell, Samsung and HTC.

"It impacts how we run the company, how we develop new experiences, and how we take products to market for both consumers and businesses," Ballmer says.

"This is a significant shift, both in what we do and how we see ourselves - as a devices and services company."

Hastings leaves board of directors

Ballmer also announced that Netflix founder Reed Hastings has decided not to seek re-election to Microsoft’s board of directors.

“Reed has been a terrific board member, and his insights and experience have really helped guide us through a critical period of transformation for both Microsoft and the industry,” Ballmer says.

Hastings will continue to serve through the annual meeting of Microsoft shareholders in November when board will then appoint a new lead independent director.

“I’m thrilled to have served on the board at such a pivotal time for Microsoft, including the development of Windows 8, Windows RT and Microsoft Surface, which will bring exciting new opportunities for customers and the industry as a whole,” Hastings says.

“I’ve decided to reduce the number of boards I serve on, so that I can focus on Netflix and on my education work.”

Hastings currently serves on the boards of Netflix, Facebook, Microsoft, Dreambox Learning, the Knowledge Is Power Program (KIPP), and the California Charter Schools Association (CCSA).

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