January 7, 2007 6:30 PM PST

Home sweet home for Microsoft

LAS VEGAS--The digital living room is taking many forms, and Microsoft is hoping to have a place in all of them.

In his annual address to the Consumer Electronics Show here, Chairman Bill Gates showed off a new home server and a new crop of small entertainment PCs, as well as new software that will allow the Xbox 360 to serve as a gateway to Internet-based television.

Gates keynote

Gates kicked off his keynote before a crowd of about 5,000 at the Venetian by saying he would be back next year, despite plans to step down from full-time work from Microsoft in 2008.

"After that, I'm not sure they'll want to invite me because I might talk more about infectious diseases," he said, referring to his philanthropic work. "If they want me, fine."

Gates' speech also served as a coming-out party for Windows Vista. The operating system was released to businesses in November and goes on sale in new PCs and on store shelves at the end of this month.

In particular, Gates showed a number of new PCs designed for Vista. One of the more striking designs is a round, white Vaio Media Center PC from Sony. Another of the new PCs is an all-in-one from Hewlett-Packard that features a flip-up LCD touch screen. Gates also showed off a new tablet PC from Toshiba, one of the first models that will include a second SideShow display for access to alerts and notifications even when the screen is closed. Also on display will be a new ultramobile PC from Medion.

"The strength of Windows has always come from the ecosystem around it," Gates said.

On the home-server front, Microsoft is touting a new crop of devices that consumers can use as a central place to back up and store videos, pictures and music. The devices, due out later this year, will use Windows Home Server software from Microsoft and be built by computer makers, including the MediaSmart Server from HP. The software from Microsoft is based on Windows Server 2003, but Microsoft is aiming to make the interface much more friendly to consumers.

Gates said that the home server will link up information stored on PCs, Xboxes, Zune and even allow remote access for when you are away from the home. "We think its a category that will explode in importance," Gates said.

Ideally, the devices would cost somewhere between $400 and $500, not much more than current network-attached storage products that HP and others have been touting for managing home media. HP currently has two Media Vault storage products ranging from $379 to $550.

Gates also touted the high-end version of the new operating system, Windows Vista Ultimate. To lure people to that pricier version, Microsoft is offering some additional features, known as Ultimate Extras.

One of the extras is DreamScene, which lets consumers have a video, rather than a still image, as their screen backdrop. Users can either run their own digital video or choose premade video such as a cascading waterfall or a field of windswept sunflowers.

Microsoft included a reference to Ultimate Extras in test versions of Vista dating back to June, but had not detailed the perks until now.

Microsoft also revealed new content partners for its Media Center PC. The remote-control-based entertainment software will add new channels from Nickelodeon, Fox Sports and Showtime. The SportsLounge from Fox will allow people to watch a game while simultaneously getting scores and video from other games. Showtime's channel will offer hundreds of hours of programming and allow non-subscribers to purchase individual episodes of some Showtime programs.

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Vista was also the prime topic at last year's CES, where Gates displayed some of the operating system's consumer features for the first time.

Gates was joined on stage by Robbie Bach, president of Microsoft's Entertainment and Devices division, who talked specifically about entertainment. On the Xbox front, Microsoft surpassed its goal of shipping 10 million Xbox 360s by the end of last year, by shipping 10.4 million of the game consoles. Microsoft also talked about new software that will allow the Xbox 360 to serve as a set-top box for those who subscribe to Microsoft's Internet Protocol-based television. The software will be available by this year's holiday season.

Bach also noted that the biggest thing to happen for the Xbox 360 this year will be the arrival of Halo 3 and then showed a trailer for the highly anticipated game.

Using an Xbox Live for Windows service that will debut this summer, players can invite their friends to play games, with some playing on the Xbox 360 and others on Vista-based PCs, Bach said.

Five service providers are currently deploying Microsoft's IPTV software, while eleven more are in the pipeline.

While most of the keynote was devoted to products shipping this year, Gates ended by re-creating onstage some elements of the concept home of the future that Microsoft has on its corporate campus in Redmond, Wash. Gates also showed a teenager's room that uses OLED (organic light-emitting diode) technology to display images on the walls and a kitchen that uses RFID to make dinner recommendations based on the ingredients on hand.

But Microsoft's entertainment ambitions extend beyond the home. Gates promoted a partnership with Ford. Starting this fall, a dozen lines from Ford and Lincoln Mercury will feature Sync, a Microsoft-based system for, among other things, voice dialing of cell phones and having text messages read to the driver through a car's sound system. Ford plans to add Sync to all its models by 2009.

"We're not leaving the car out, we're connecting you even there," Gates said.

As always, the keynote included a few jovial videos. Poking a bit of fun at himself, Gates showed off a highlight reel of speeches from years past, including flubs and outtakes. A second video, coinciding with HP's media server, featured Gates talking about the media in his home, including Ballmer's infamous Monkey Boy video.

This was not the first time Gates has incorporated the infamous "developers, developers, developers" video into a keynote. He used it as part of his 2001 Comdex keynote.

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Bill Gates, NAS, Consumer Electronics Show, Media Center PC, Microsoft Windows Vista

 

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