Gates Sees 2006 as the Year For 'The Digital Lifestyle'

By Mike Musgrove and Arshad Mohammed
Washington Post Staff Writers
Thursday, January 5, 2006

LAS VEGAS, Jan. 4 -- Microsoft Corp. Chairman Bill Gates outlined his vision for the future of consumer technology in a major speech Wednesday night at the International Consumer Electronics show in Las Vegas as he unveiled an array of new products aimed at the growing appetite for digital entertainment.

During his speech, Gates painted a picture of a digital world in which many devices, including cell phones, computers and televisions, seamlessly complement one another.

"Technology has revolutionized how we listen to music, watch TV, play games, communicate and manage and share personal information," he said. "2006 is going to be a big year for the digital lifestyle."

He demonstrated a computerized wall easel for the home that can show television images, keep track of family members and interact with an office computer. He also showed a phone that can make calls over standard phone lines and calls using voice over Internet protocol technology.

Gates's address is one of the most closely watched events at the annual trade show, a techie's paradise where more than 2,500 exhibitors, from A-Data Technology Inc. to Zyxel Communications Corp., hope they have dreamed up the next hit.

Even though Yahoo Inc. and Google Inc. are getting a lot of attention for their latest innovations, many still regard Gates as the ultimate geek. He has addressed the convention every year for the past decade.

Wednesday night, those hoping to hear his address in person at the Las Vegas Hilton had to wait in a long line that snaked through the hotel's casino floor, past a bar where patrons watched the Rose Bowl. Attendees whiled away the time in line by playing with gadgets they brought with them.

Microsoft advertised Gates's speech prominently on its Web site, displaying a picture of the founder of the $40 billion software company with his eyes gazing at the horizon. Beside his image is the question "What's the next big thing?"

Trying to sort the wheat from the chaff is a perilous task for the scores of executives, analysts and journalists who flock to Las Vegas for the show and -- if the past is any guide -- it is not much easier for the chairman of the world's dominant software company.

In 2001, Gates used his speech to offer a glimpse of the Xbox video game console -- a product that became a home run for Microsoft. Three years ago, he waxed enthusiastic about a Dick Tracy-like wristwatch designed to deliver such information as weather reports and sports scores, but the product has yet to catch fire.

His speech Wednesday night came as Microsoft wrestles with the latest Windows security flaw and the rising threat from Google. Gates's keynote did not address either of those issues.

He did discuss the new Windows Vista operating system and showed off some of its features, including quicker content searches and an upgraded media player. The program is scheduled to be released later this year, but Gates did not say when.

The latest security flaw, revealed last week, allows hackers to break into computers running versions from Windows 98 through the most recent Windows XP. Microsoft is testing a patch to fix the problem and plans to release it Tuesday. Security experts have criticized Microsoft for not issuing a patch sooner and took the unusual step of advising users to install a patch created by a third party.

The company is also coping with the aftermath of a shortage of Xbox 360 video game consoles during the holiday shopping season. Gates attributed the scarcity to high demand.

Microsoft is also being challenged by Google, which last month said it would buy a 5 percent stake in Dulles-based America Online Inc. for $1 billion as part of a far-reaching business and advertising partnership.

The deal was a setback for Microsoft, which had sought to replace Google as the search engine on the AOL service and had been in talks with AOL's parent, Time Warner Inc., since last January.

Google and Yahoo Inc. each have booths on the convention floor this year, and the Web giants have sent their top players to the show. On Friday, Google co-founder Lawrence E. Page and Yahoo chief executive Terry S. Semel, are scheduled to deliver keynote speeches of their own.

Mohammed reported from Washington.

© 2006 The Washington Post Company