Microsoft Chairman and Chief Software Architect Bill Gates opened the 2003 International Consumer Electronics Show (CES) on the night of January 8, 2003, with a keynote address titled "Smart Living in the Digital Decade." The talk highlighted the company's successes in digital media, video gaming, and home networking while pointing to future technologies that the company will release later this year and in the future. Gates did his usual deadpan humor bits and presented a few humorous video clips, one of which spoofed VH1's "Behind the Music" series. Industry celebrities such as Marc Andreessen and John Sculley appeared in that clip, as did actor Anthony Michael Hall, who portrayed Gates in a made-for-TV movie called "Pirates of Silicon Valley." Gates quipped that one of his New Year's resolutions was to ask USA Networks to make a sequel.

"Smart living in the digital decade is possible because of advances in three key areas coming together: devices, connectivity, and services," Gates said. "Advances in each category drive the other categories. A lot of the big predictions we made about the digital decade are now taking place, thanks to pervasive broadband, wireless networking in the home, and devices with advanced smart screens, disks, and memory."

Gates then took attendees through the company's recent product successes with the Tablet PC (see my review) and the Media Center PC (see my review), both of which require special Windows XP versions. "We sold 90 million copies of XP in 2002," Gates said. "It was the strongest year ever for any version of Windows." Gates also talked up Windows Media 9 Series (see my review), Windows Movie Maker 2 (see my review), and Plus! Digital Media Edition (see my review), which the company released earlier this week. The first Windows Powered Smart Displays hit retail stores the same day, he said.

Looking toward 2003, Gates discussed some of the smart devices we can expect in the coming days, including new Pocket PC devices and Windows Powered Smartphones; various Smart Displays; new Media Center PCs, including laptop products from Alienware and Toshiba; and some interesting noncomputer-type devices, such as an exercise machine and sewing machine that feature Windows CE .NET, flat screens, and Internet connectivity. An especially interesting device--Media2Go--is a Microsoft prototype that various hardware partners will sell in late 2003 (see my exclusive preview). Essentially a portable media player with a 4" LCD screen, Media2Go also includes a 20GB hard disk, which Microsoft says is large enough for 175 hours of digital video, 8000 songs, or 35,000 photos.

After Gates played against Los Angeles Lakers star Shaquille O'Neal on Xbox Live, Gates hinted at an upcoming revision to Microsoft's broadband networking products that will feature "better speeds and new security and quality of service capabilities that will enable voice and multimedia services over wireless." We later found out that Microsoft will ship 802.11g-based home networking equipment in mid-2003. Gates also talked up other wireless technologies such as Bluetooth and 3G.

Bringing all these advances together, Gates said, is a technology initiative called Smart Personal Object Technology (SPOT), which he first discussed during his COMDEX 2002 keynote address 2 months ago (see my exclusive SPOT preview). SPOT will bring all the technologies Gates discussed together into new, small form factors and reenvision common household items as interconnected smart devices. And although the company has many plans, including smart alarm clocks, refrigerators, and other devices, the first deliverable product will be a smart wristwatch platform that major watch makers such as Citizen and Fossil will support. I'll write a separate article about the SPOT wristwatch and related technologies such as smart magnets. These products feature small LCD screens, SPOT silicon, and interconnectivity with services for weather, news, sports, and related information through the new Microsoft Direct Band networking scheme, which uses the FM band to send data. These products will be available in late 2003.

CES vs. MacWorld: Jobs Wows Faithful at Macworld, Ignores Switch Failure

Apple Computer CEO Steve Jobs knows how to get the Macintosh faithful in a near-religious frenzy, and he put on a bravura performance last week during his Conference & Expo San Francisco 2003 keynote address. Jobs introduced new laptops and some interesting new software that lessens his company's reliance on Microsoft. Jobs's keynote, however, conveniently skipped over some basic market realities that now face Apple, the most damaging of which is that the company's high-profile Switch ad campaign, in which real people discuss their moves from Windows to Apple's Mac OS X, has been a complete failure.

Nevertheless, Jobs surprised the crowd with new hardware and software, virtually none of which the hype-heavy Apple press, which had been eagerly anticipating Macworld, predicted. The new hardware includes two new PowerBook G4 laptop computers: a 12" model that's virtually identical to the consumer-oriented iBook line and a mammoth 17" model that's apparently the laptop equivalent of the Ford Excursion. Both new PowerBooks eschew the build-quality-challenged Titanium casing of previous PowerBooks for a new aluminum-based design. Both computers are also available with optional AirPort Extreme wireless networking, which uses a preliminary version of the 54Mbps 802.11g wireless specification; Apple also introduced an AirPort Extreme base station.

On the software side, some of Jobs's announcements seemed more designed to anger Microsoft than fill particular product needs. For example, he announced an Apple-branded Web browser called Safari that's based on KHTML technology from the Linux K Desktop Environment (KDE)--even though the Mac OS X already has several available browsers--and Keynote, a presentation package that focuses on Microsoft PowerPoint.

But not all of Apple's new software announcements are superfluous. Jobs announced a new $50 digital-media suite called iLife that bundles iTunes 3 with new versions of iPhoto, iMovie, and iDVD, all of which will be available with new Macs for free. Apple iPhoto 2 includes new one-click photo enhancements, a Retouch tool, photo archiving to CD-ROM or DVD, and email integration. Apple iMovie 3 features a completely overhauled interface, new special effects, and a way to add DVD chapter marks to movies. Apple iDVD 3 adds 24 new pro-quality themes, integration with iMovie 3's chapter marks, and new theme customization features. The iLife package will be available January 25, as will free downloads of iPhoto 2 and iMovie 3.

Because Jobs gave his Macworld address just days before Microsoft Chairman and Chief Software Architect Bill Gates presented his 2003 International Computer Electronics Show (CES) keynote address, not comparing the two events is impossible. The most obvious difference is support: Apple appears to be interested in going it alone, even to the extent of creating applications that don't break new ground or introduce new product categories but instead compete with existing third-party applications. Meanwhile, Gates's address continually touted Microsoft's many industry partners, such as the hardware makers working on Media2Go and Smart Personal Object Technology (SPOT) devices, Media Center PCs, and Tablet PCs. All of Microsoft's initiatives appear to be collaborative efforts, whereas Apple is basically circling the wagons and seizing any lucrative (and in the case of Safari, nonlucrative) businesses for itself. Put simply, comparing the reality of these two companies with way the public perceives them is astonishing.

News blurbs from CES 2003

Gates Keynote Underwhelms

Coming as it did just days after Apple Computer's CEO Steve Jobs delivered his Macworld San Francisco keynote address (which I'll report on in Monday's WinInfo Daily UPDATE), Microsoft Chairman and Chief Software Architect Bill Gates's 2003 International Consumer Electronics Show (CES) keynote address on Wednesday evening had a lot to live up to. In many ways, however, Gates didn't measure up: If you break down his talk, you'll find that he primarily discussed previously released products or updates to those products. Gates mentioned only two truly new products: Media2Go, which is essentially a video version of Apple's iPod, and the Microsoft SPOT Watch. I can't get excited about a connected watch. (I had two of those Timex data watches years ago, by the way.)

Apple Should Have Made Media2Go

I'm excited about Media2Go, a handheld multimedia device that plays videos, music, and photo slideshows. Media2Go is the size of a thick paperback book, and various consumer electronics companies--including IRiver Samsung Electronics, SANYO Group, and ViewSonic--will make it. The Windows CE .NET (formerly code-named Talisker)-based device features a 320 x 240 color screen and a 20GB hard disk. The UI, which is based on Windows XP Media Center Edition, allows simple navigation with menu choices such as My Music, My Videos, My TV Shows, and My Pictures. Microsoft claims that the devices provide 12 hours of battery life while playing audio content and 6 hours while playing video. You'll need that time, too, because the Media2Go takes advantage of new Windows Media 9 Series media formats to deliver up to 8000 Windows Media Audio (WMA) 9 audio files, 175 hours of 320 x 240 Windows Media Video (WMV) 9 video, or up to 30,000 2 mega-pixel photos.

Shifting Time and Space

The computer industry is awash in buzzwords and phrases, and here's an interesting new phrase to chew on. You might have heard about the concept of "time shifting," in which you use a video-recording device to delay the viewing of live content, such as TV shows. This year, a sea of portable video devices has given rise to a new term--space shifting, in which you not only delay the viewing of live content but watch that content away from the device that recorded it. Arguably, we've been enjoying content away from the recording device since the days of Sony's first Walkman, but recording a live TV show and viewing it in full quality on a portable device is still a relatively new concept.

Microsoft Has a Plan for Smart Displays

One of the most obvious complaints about the first round of Windows Powered Smart Displays is that the devices are expensive and easily replaced by low-end laptops, which are comparatively priced but far more powerful. To combat this problem, Microsoft and its hardware partners are working on ways to improve the platform, including some interesting ideas for making the devices useful when they're not remotely displaying your XP desktop. ViewSonic, for example, made two announcements in this vein. First, the company will offer a version of its 10" secondary display that won't include XP Professional Edition or a USB wireless adapter, shaving at least $300 off the device's retail cost (usually about $999). And the company struck a deal with Nevo Technologies to supply home-automation software for the Smart Display, giving users a secondary use for the device. Other hardware makers are working on similar plans and, for the next Smart Display revision due in late 2003, Hewlett-Packard (HP), Microsoft, and other companies are working on faster wireless technologies, ways to improve overall performance, and any areas in which customers say the experience is now lacking. Again, I'll provide more details soon on the SuperSite for Windows, along with a full review of the ViewSonic airpanel V150 Wireless Smart Display.

Media Center Goes Mobile, Finds More Support

I'm happy to see new Media Center PC form factors arriving, and some of the new designs--especially the laptop-computer-based systems from Alienware and Toshiba--are exciting. Many of the newer Media Center PCs are designed to look at home next to your stereo equipment, and more attractive, non-PC-looking designs are starting to arrive. Now if only we could convince Microsoft to let us buy the XP Media Center Edition software separately from a new PC, we could all enjoy this exciting new interface to digital media.

Companies Fight Media Center PCs with Set-Top Boxes

Many hardware makers are obviating the need for a Media Center PC by creating set-top boxes that interact with your PC's digital-media content through a home network. HP and SONICblue are two good examples: The companies offer similar devices that feature a TV-based UI, wireless and Ethernet compatibility, and interaction with your PC. The idea is that a PC is a great place to acquire digital photos, music, and video but isn't necessarily a great place to use that media. With these new devices, such as SONICblue's GoVideo network DVD player (available in March for $250), you can stream digital-photo slideshows, digital-music playlists, and digital video from your PC to the TV set. $250 is a lot less expensive than the cost of a Media Center PC, and the devices are arguably of far more use to most consumers.

SONICblue Advances State-of-the-Art in the Living Room

Speaking of SONICblue, the company has also rethought digital video recording (DVR), a suddenly surging technology the company helped jumpstart with its ReplayTV devices. SONICBlue's GoVideo line of products has always done double-duty, with dual VCR decks and combination DVD/VCR devices. This year, however, the company is introducing the GoVideo DV6430, which combines a DVD player and VHS VCR in one machine, along with 128MB of RAM, so users can pause and rewind live TV. The device is a simple, elegant solution for those times when the phone rings or you want to watch a football replay. The GoVideo DV6430 can store up to 15 minutes of MPEG-2-quality video, enough time for a quick trip to make a sandwich. SONICblue also touted the automatic-commercial-advance and connectivity features of its new ReplayTV 5000, which the company introduced in October. The ReplayTV devices have had the ability to display photos from your home computer for some time; the company is adding the ability to stream music from PCs later this year.

Personalized Devices Dominate

Like last year's show, 2003 International CES is all about devices, not PCs. Many of these devices connect to PCs, and although connectivity is a theme (of sorts), many of this year's devices tout personalization features. For example, Philips Electronics showed off its Emotive Micro stereo systems, which come in a wide range of color choices to match your home decor. And HP is taking an interesting approach to personalization with a new printer, the HP DeskJet 3425, which can print its own skin. The DeskJet 3425's top panel is clear, so you can print a photograph of your choosing and insert it into the panel. It's a nice effect, prettying-up an otherwise boring home office device.

Transmeta Moves from PCs to Devices

Although ultra-mobile CPU maker Transmeta will continue to ply its wares to laptop makers, the company is moving into the potentially far more rewarding market of PC-like devices and other devices. One intriguing Transmeta solution is the OQO Ultra-Personal Computer, a full XP-based PC that's smaller than the Media2Go devices, yet features a larger 800 x 400 screen, USB 2.0 and FireWire ports, and docking connections so that you can use it at home with your large monitor, keyboard, and mouse. Transmeta also exhibited various Tablet PC designs, new ultra-slim notebooks that don't have fans, home-storage servers with hot-swappable 2.5" hard disks, various embedded product platform boards, and rack-mounted server blades. The company also demonstrated its next-generation Crusoe processor (code-named Astro), which will ship by the end of the year. Astro features desktop-level performance but continues Transmeta's market-leading power-saving and cool-running capabilities.

What Gates Didn't Say

Thinking back on Microsoft Chairman and Chief Software Architect Bill Gates's keynote address, the speech was most interesting because of what Gates didn't say. For example, during an overview of the Microsoft-oriented hardware products that are now shipping or will ship soon, Gates conveniently skipped over the Windows Powered Smartphone devices, which have had disappointing support and have been slow to market. In the United States, AT&T has committed to the release of Smartphone devices by the first half of this year, but precious little other news is available, including which company or companies are making the phones and which carriers will support the system. Gates and company have been pushing Smartphones for 2 years, and Microsoft continues to tout this technology at every trade show I attend. Will it ever happen?

SPOT Success Unclear

Aside from Microsoft's Media2Go devices, the Smart Personal Object Technology (SPOT) wristwatch platform, which at least three major watchmakers will support, was the company's big announcement. However, the SPOT watches are enormous, especially the first-generation devices that go on sale later this year, and how much SPOT services will cost is unclear. Those services will feature a new Microsoft-created one-way networking scheme called DirectBand that uses the extra bandwidth on FM frequencies. The network is already running in several US cities, the company said. Some of the SPOT watch scenarios, such as sports fans at live games getting other teams' scores, are pretty exciting.

Don't Get Too Excited About Future Windows Technology

At the end of his keynote address, Gates dragged out Steve Guggenheimer, cryptically identified as a Microsoft director, whatever that is. Guggenheimer, you might recall, gave the infamous MSN demonstration in mid-2001 at the Microsoft Financial Analysts Meeting that caused many rumor sites to excitedly publish what were purportedly Longhorn and Blackcomb screen shots and movies. Guggenheimer was at it again last week, demonstrating future UIs designed for home-networking interactivity. As with the earlier MSN demonstration, however, none of the UI features he demonstrated will appear in any future Windows product, and the company has been using similar UIs in the Microsoft Home project, which I recently visited again at the company's campus. In other words, if screen shots from this demonstration appear on the Web purporting to be Longhorn, I'm going to scream.

Microsoft Sells Smart Displays Home

One of the most exciting demonstrations this year was the Windows Powered Smart Displays exhibit, which involved a house erected in the Las Vegas Convention Center's parking lot. And it wasn't a scale model: After visiting the home, I can tell you that it was a livable abode, and Microsoft said that a local contractor purchased the home and will erect it on a lot somewhere in town.

Crowds Continue to Dominate

Unlike crowds at COMDEX, the CES crowds continue to get bigger every year, and long cab lines, fully booked hotels, and impossible-to-get dinner reservations dominated Las Vegas, Nevada, last week. CES remains a big show with big crowds.

Being the Butterfly Isn't Better

A host of Microsoft people dressed as MSN butterflies plied the show floor with giveaway CD0-ROMs and MSN gear. This year, they weren't wearing roller blades, which was probably for the best, but you have to feel bad for the people who had to dress up in those skin-tight costumes.

And the Show's Theme Was ...

...TV. This year's CES was all about TVs. Big-screen TVs. Wide-screen TVs. High-Definition Television (HDTV) TVs. Flat-panel TVs. Plasma TVs. LCD TVs. Digital Light Processing (DLP) TVs. Wherever I looked, there they were: Screen after screen in an ocean of screens. TV technology is improving dramatically for the first time in many years. The sets I saw at CES featured amazing clarity; I overheard one attendee say, "It's like my eyes just got better." I couldn't explain it better myself. All over the show, crowds formed at each large-format TV display. The long-awaited HDTV technology will finally happen when people can see just how good these sets look.

Don't Forget Convergence

Convergence was another big theme, with companies combining technologies in interesting new ways. Many companies featured combination DVD players and digital video recording (DVR) devices, for example, or set-top boxes with integrated HDTV and DVR capabilities. Toshiba announced a TiVo device with a DVD player, and Polaroid showed off a DVD player with hardware support for Windows Media Video (WMV) 9-encoded data DVDs. Cell phones are also going the convergence route; new models feature built-in digital cameras, digital photos, music, videos, and support for games.

Question of the Week

Where was Sony? Last year, the company dominated CES with a huge booth and several side areas. I'm sure the company attended the show, but I never saw it, even though I walked the entire show floor.

CES 2003 Photo Gallery

Here are some pictures from the show! All photos by Keith Furman.

Philips Emotive audio players, available in a variety of colors.
The new HP Deskjet 3425 color inkjet printer features a skinnable top.
The OQO personal computer, running Windows XP!
Transmeta was showing off a variety of ultra-thin, ultra-cool laptops like this one...
...as well as an amazing array of other devices such as this RLX blade server.
Enter Bill Gates, king of all he surveys.
Bill Gates takes the stage for his keynote address.
Microsoft's John O'Rourke shows off various connected smart devices during the Gates keynote.
The main screen of a future Windows version prototype user interface. (Gates keynote).
A future parental controls interface. (Gates keynote).
A future kid's desktop interface. (Gates keynote).
Microsoft built an actual house in the LVCC parking lot to show off Smart Displays to the public.
Inside the Smart Displays house, tour-goers use the devices during a demo.
Behind the Smart Displays house, we saw 15" and 10" Viewsonic displays.
Exterior, LVCC.
Morning comes early in Vegas. Traveling to the West coast turns me into a morning person.
Microsoft's Tom Lammael shows off some new Media Center PCs.
Viewsonic was using this sweet flat panel display with its new Media Center PC.
Paul takes to the floor on Saturday, after all our meetings were done.
Interior, LVCC.
A SPOT watch, shown actual size.
MSN TV, with integrated mesaging so you can enjoy the game with friends.
Ice Box was showing off kitchen appliance-style PCs that feature waterproof parts.
Here's an Ice Box under-the-cabinet PC design.
Yes, it's bettery with the butterfly. Much, much better.
Many companies were showing off flat, wide-screen TVs in a variety of formats.
Paul finally meets Spongebob Squarepants.
A new Polariod DVD player--available in 60 days--can play back WMV 9 files natively.
The Intel prototype for the Media2Go device.
This Toshiba portable audio player looks oddly familiar. Next to it is the Toshiba PC Card hard disk that drives it.
Toshiba signed a deal with TiVo to supply an HDTV-capable digital video recorder with integrated DVD drive. Sweet!
This tricked out VW bus was one of the few displays that held our attention in the car technology section.
The Stratosphere hotel, near the LVCC.