Q&A: Digital Living is the Focus of Consumer Electronics Show as Technology Expands At-Home Role

Steve Guggenheimer, Microsoft’s Senior Director of Business Management Click for a high-resolution image.

LAS VEGAS, Nev., Jan. 7, 2002 In the last decade, Microsoft has worked diligently to bring a PC to every desktop. Research shows that people who have come to rely so strongly on PCs in the workplace today are anxious to harness the power of technology more readily in their homes.

With the releases in 2001 of Windows XP, MSN 7, Xbox and Pocket PC 2002, plus consumer applications such as Encarta and Money, Ultimate TV and hardware peripherals, Microsoft is for the first time delivering a set of products that will enable a new generation of consumer experiences and provide the basis for a future where technology increasingly works better on behalf of the user.

At the same time, Microsoft is working toward the next generation of products. Microsoft’s Windows eHome and Embedded divisions are developing technologies, teaming with leading consumer PC and consumer electronics manufacturers, and working with other Microsoft groups to stretch the PC’s capabilities to offer entertainment, communications, information and control experiences to people anywhere in their home.

With “Freestyle” technology, for instance, people need not be chained to their desks to experience their PC’s digital-media content. With a simple remote control and a new, easy-to-navigate user interface (UI) optimized for viewing from a distance, people will be able to play music, view photos or watch videos from anywhere in the room. “Freestyle” also will allow users to enjoy a new “television experience” with the ability to search for TV shows with a built-in electronic programming guide, and to watch, pause and record live TV from their PC. In addition, the new “Mira” technologies will allow users to undock their monitors and carry them anywhere around the house, accessing content anywhere they go, or access the same content from new flat screen TV’s in the future.

On the eve of the 2002 International Consumer Electronics Show in Las Vegas, PressPass spoke with Steve Guggenheimer, Microsoft’s Senior Director of Business Management, about how the company sees 2002 as the beginning of the “digital decade” for consumers. This, says Guggenheimer, creates tremendous opportunities to provide new experiences and benefits for people in their daily lives and for the companies, like Microsoft, that can help deliver these future innovations.

PressPass: How long has Microsoft been honing its consumer efforts, and can you briefly describe some of the work being done in that arena?

Guggenheimer: Microsoft has been working on technology for the home ever since the PC came out. I would say over the last 10 years, our strategy has evolved in line with key technology trends. In the early and mid-1990s Microsoft focused on enabling the PC on every desktop. That meant creating software that helped make the PC a real productivity device for the home, things like a reference suite, personal finance software, a home “Works” suite, and, of course, PC games.

In the late 1990s we focused on taking the technology that’s made the PC a great device in the home and extend it to other devices. That’s when we released Windows CE, a platform that makes devices work better together, making them smarter because of software. With the release of CE we saw the first generation of things like the Auto PC and the handheld PC, an early version of today’s personal digital assistants (PDAs) and advanced set-top boxes. We also focused on creating the underlying technologies that work well across various platforms such as; digital media, device interoperability via Universal Plug and Play, and interactive television.

Now you see Microsoft starting to bring the power of software to a new generation of best-of-breed products that work better — and work better together — to enable a new generation of experiences for consumers. For example; you see software being used to make the Xbox the most critically acclaimed game console available. You see services like MSN help make the Web more useful for people. You see how, with the release of the Windows XP operating system, the PC has evolved from a center for productivity to a complete activity center. With these three cornerstone products, plus the other products and services we provide, Microsoft is helping people simplify their daily lives, communicate and find information more easily, and enjoy more individualized entertainment from today’s homes.

PressPass: Can you highlight some of the products Microsoft is showcasing at CES?

Guggenheimer: At CES this year, Microsoft is building on the phenomenal success of efforts from last year, as well as unveiling new technologies that we think consumers will really want in the future. First, we’re showing how we’re going to extend the experiences we enabled with Windows XP to be available more easily throughout the home through new “Freestyle” and “Mira” technologies. With “Freestyle” technologies, users will be able to share their photos, music or other digital media with other people more easily, through a new long-distance user interface and remote control. This complementary UI for Windows XP allows people to navigate a PC for viewing digital media as easily with a remote control as they do today with a mouse and keyboard. With Freestyle technologies, partners will also be able to add a TV tuner card to a PC, creating a new television experience which includes all the capabilities of today’s personal video recorders. In addition, we’re showing how “Mira” technologies will enable a whole new generation of smart displays that allow you to project, or to get access to, your PC content from anywhere in the home, either by carrying a flat-screen monitor around with you, or by having your flat-screen TV directly provide access to your PC content.

In addition, we’re demonstrating a new generation of portable devices built on the CE.NET platform. And we’re demonstrating how telephones and PDAs are coming together through both the Pocket PC form factor as well as the Smart Phone form factor, including the unveiling of the Smart Phone 2002.

Lastly, we’re highlighting the products we’re developing in the entertainment area, including advances Windows Media technology has made in terms of compression. This includes a new generation of DVD players from top manufacturers like Panasonic that will in the future play the equivalent of four movies on one DVD. Also, we announced support from key car-stereo manufacturers who will create car CD players supporting new technologies which will allow users to record and play up to 22 hours of music on one CD. Lastly, we’re showing several new titles for the Xbox console, and our vision for how Xbox will continue to move forward with online capabilities in the future, making the games even more immersion than they are today — enabling play among multiple players, even if they’re not located in the same physical place.

PressPass: What does it feel like to be a software company at CES? Are you comfortable in that space?

Guggenheimer: Absolutely. Previously, when people thought about consumer companies, they really thought about traditional commodities companies. They thought of products, like cereal, laundry detergent or automobiles. As technology becomes a more integral part of people’s daily lives, people are beginning to understand how technology companies are providing great products for consumers as well. I think consumer electronics companies play a significant role in this way, as do the content and media companies. And I think software companies such as Microsoft play significant roles here. So, not only do we feel great about being at CES, we actually think we’re helping people understand how, as technologies converge, software provides the magic that helps make devices work better together on behalf of consumers.

PressPass: How do the Windows eHome vision and the “Mira” and “Freestyle,” technologies fit into Microsoft’s overall consumer strategy?

Guggenheimer: . Since several of the experiences enabled in Windows XP are social in nature — photos, home movies, music — Microsoft will provide the technology share these experiences from anywhere in the room with a PC through a new long distance viewing experience, along with a complementary remote control, via “Freestyle” technology. In addition, “Freestyle” will enable a new “TV experience” on the PC. With a TV tuner card, users will now be able to take advantage of personal video-recording capabilities from their PCs, similar to what can be done on an Ultimate TV receiver today. Lastly, Microsoft is working with several computer makers to provide first generation PCs that support the extended experiences in the coming year. Combined with “Mira”-based “Smart Displays,” sharing digital media around the home will become much easier in the coming years.

With the “Mira” technologies, Microsoft is working with PC companies and consumer electronics companies alike to create a new generation of “smart monitors.” By integrating Windows CE.NET and networking hardware into next generation televisions and PC monitors, users will be able to access their applications and content anywhere in their house. With “Mira,” users will be able to undock their monitors and carry them anywhere around the house, accessing their content anywhere they go, or access the same content from new flat screen TVs in the future.

PressPass: What kind of response are you receiving from the rest of the industry for these new technologies? How will consumer electronics companies, like TV manufacturers, or service providers, factor into Microsoft’s vision for extending the PC experiences around the home?

Guggenheimer: The response, so far, has been great. Microsoft is just one company in the ever-growing ecosystem of consumer technology. As such, we’ve been working very hard to link with industry leaders from the consumer electronics and consumer PC areas to help deliver the full “Freestyle” software/hardware experience. The first of these companies to line up include Hewlett Packard, NEC and Samsung. We announced our partnership with Samsung in October and are thrilled to also team with HP and NEC. In addition, the “Mira” group is teaming with leading companies, including Intel, National Semiconductor, ViewSonic Corp. and Wyse Technology to deliver Mira-enabled smart devices.

PressPass: What trends have prompted Microsoft to make the development of at-home products, services and software a priority?

Guggenheimer: There are a set of technological trends that are making software a much more critical foundation for the home. First, as a broader range of devices begin to take advantage of PC technology — such as game players, personal video recorders, the pocket PCs and PDAs — software plays a more important role in helping those devices work better and work better together in conjunction with the new generation of home PC’s. In addition, the increasing availability of simple home-networking kits, in particular wireless, means software can be used to share information and make devices work better together. These trends, in conjunction with the ongoing conversion of traditional analog media, such as books, newspapers, movies and music, into digital formats, means the use of software in the home is really just beginning.

PressPass: We’ve been hearing about consumer technology for a while now; how are people responding?

Guggenheimer: Response has been very positive, though it is evolutionary in nature. Research shows that the PC is actually the device that people care most about in the house. In addition, adoption of smart, connected devices continues to increase, along with the use of digital media. We consider this a positive sign that people are not only beginning to use, but understand and appreciate the inherent value of, technology and software in the home.

PressPass: What are the benefits for people embracing this at-home technology?

Guggenheimer: Many people already use technology to help simplify their lives; whether it’s keeping track of the kids’ schedule, managing personal finances, or just going shopping, software can help out. It also helps in terms of how we communicate with people and find information, so whether it’s using instant messaging, video communication, or e-mail, today it’s easier than ever to communicate with family and friends, as well as to find information people care about, whether it be a map, a restaurant, or old friends. Lastly technology is helping the way we are entertained, whether it’s being able to create our own music play list and play our choices on any device, whether it’s being able to record television programs easily with a simple remote control, or whether it’s playing games with Xbox, technology is making our entertainment more personal and more fun.

PressPass: We hear a lot about broadband. When will that come together?

Guggenheimer: I think broadband is starting to take off more and more each year. Microsoft believes strongly in the power of broadband to make devices and media more accessible and easier to use for the consumer, so we invest time and energy in this area. We work hard to make sure that our products support broadband, whether that’s making sure that Windows XP is a great device for sharing broadband around the home, having Xbox be the only game device that has broadband built in, having Windows Media technologies that are optimized for broadband, or insuring MSN provides great broadband services. Microsoft is committed to broadband technology. In addition we work hard to support our partners who are rolling out broadband.

PressPass: 2001 was a big year for Microsoft, with Xbox, MSN 7 and Windows XP. How did these products sell this holiday?

Guggenheimer: This was a great holiday season, and we demonstrated that Microsoft is building products that are very appealing to consumers. Microsoft sold 1.5 million Xbox units in North America through the end of the 2001, one of the fastest-selling games systems ever. MSN has been doing phenomenally well. Visitors to MSN spent US$5.6 billion online during the 2001 holiday season, an increase of 56 percent over the 2000 holiday period, exceeding initial predictions. Finally, Windows XP has been a big success and is the fastest selling release of Windows ever. In just over two months since its worldwide debut, Windows XP has incredible momentum: more than 17 million copies of Windows XP have been sold on new PCs and in retail packages.

PressPass: Moving forward. What in-home innovations can consumers look for from Microsoft beyond 2002?

Guggenheimer: When you think beyond 2002, one of the things we’re doing is establishing a couple of key platforms and technologies for the home that will allow devices to work better together on behalf of consumers in years to come. Whether it’s something as simple as sharing a broadband connection or having a PDA that can act as a telephone, remote control or browser, software will enable devices to work better together and to better support the everyday needs of home users. For example, the ability to store videos, home photos, home movies, even TV programs, and watch from any room in the home will become possible. It will be possible to easily contact and communicate with family members and friends consistently from any screen or speaker in the home. And, of course, immersing ourselves in the music, games, reading materials or video programming we like will be easier then ever. That’s the direction the world is heading in — the ability to share content and information more easily for the user around the home and across devices of all kinds. It can also apply to things like energy management and security. It’s all about using technology to enhance people’s lives by simplifying their daily tasks, giving them better ways to communicate with family and friends, find information and provide entertainment that’s more enjoyable and personal.

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