Gates Unveils Innovative New Products and Services at CES, Details Vision of “Seamless Computing” for Consumers

Editor’s Note, Jan. 12, 2004 —
The number of personalized e-mail accounts included with MSN Personal Address was previously listed incorrectly in this release, and has since been revised.

LAS VEGAS, Jan. 7, 2004 — In his keynote address at the 2004 International Consumer Electronics Show (CES), Microsoft Corp. Chairman and Chief Software Architect Bill Gates expanded on the company’s vision for “seamless computing,” demonstrating software breakthroughs that deliver unified digital experiences and make the technology in consumers’ lives work as a connected whole. Gates introduced a number of products and services that bring the power of software to the world of consumer electronics, including MSN® Premium and enhanced MSN services for broadband Internet users; and new Microsoft® Windows®
Media Center Extender Technologies and Portable Media Centers, which make the digital entertainment experiences of Media Center PCs available throughout the home and on the go. Gates also announced retail availability of Smart Watches for MSN Direct, which provide discreet and convenient access to personalized information.

Comedian and TV host Jay Leno (L) gets a preview of the new MSN Premium from Microsoft’s Bill Gates at the International CES, Las Vegas, Jan. 7, 2004. Click image for high-res version.

“As computing moves to the center of our lives and more of our everyday experiences go digital, great software is the key to making all these devices and services work well together,” Gates said. “Our vision is to deliver the software that enables a seamless technology experience for people wherever they are — in the home, in the office or on the go.”

Before an audience of more than 1,200 attendees at the Las Vegas Hilton, Gates showed how Microsoft’s vision for seamless computing is already helping people manage information overload, enjoy digital entertainment and make the growing amount of technology in their lives work on their behalf and under their control. Microsoft’s unique role, Gates said, is to create innovations that make it easy for device manufacturers and consumer electronics companies to build powerful and compelling technology for entertainment, creativity and productivity in the home.

The New MSN: Tools for Communication, Learning and Life

Gates emphasized the growing value of software services for consumers, unveiling a new version of MSN, designed specifically for broadband users, which will allow them to experience the full potential of their high-speed connection through greater personalization options, a new MSN home page, free broadband content and a sweeping portfolio of new premium Web services.

Television personality Jay Leno joined Gates on stage to introduce MSN Video, a new service that delivers free broadband video content to all and My MSN visitors in the United States. The service was launched with a range of content partners, including Discovery Communications, NBC News and NBC Entertainment, and Showtime Networks.

More than 25,000 customers participated in Microsoft’s largest-ever managed beta program, providing valuable feedback during the development of the MSN Premium all-in-one subscription service. MSN Premium includes advanced communication tools for sharing digital photos and keeping in touch with friends and family, industry-leading tools to help block spam, guard against viruses and stop unwanted pop-up ads; and a range of other services for photo editing, managing finances, and online learning. Noting that people’s work and home lives are increasingly fluid, Gates showed how the Microsoft Office Outlook®
Connector for MSN can help them jointly manage their work and personal information.

Gates described MSN Premium as one of the best values Microsoft has ever offered. Purchased separately, the software included in MSN Premium would cost over $350 (U.S.) per year, while MSN Premium sells for $9.95 a month or $99.95 per year.*

The keynote also featured a range of other new offerings from MSN, including MSN Plus, a service for MSN Hotmail®
and MSN Messenger enthusiasts looking for advanced communication tools; four sizes of MSN Extra Storage; and MSN Personal Address, which includes a personal Web address and up to five personalized e-mail accounts.

New Software for Seamless Digital Entertainment

Gates noted the momentum of digital entertainment, as growing numbers of people enjoy digital music, photos, movies, television and games in the home and on the go. He emphasized Microsoft’s software innovations that extend the reach of digital media beyond the PC to anywhere people want it, unveiling Windows Media®
Center Extender Technologies, which allows the Windows XP Media Center Edition PC to be used as an entertainment hub for the home. With a Windows Media Center Extender product, people who use a Media Center PC to listen to music, record television shows, view photos or download movies on demand can enjoy these experiences on any television in the home, even if the PC is being used at the same time by another family member elsewhere in the home.

Microsoft is working with a number of leading manufacturers, including Alienware Corp., Dell, Gateway Inc., HP, Samsung Electronics Co. Ltd., Tatung Co. and Wistron Corp., to develop new televisions and set-top boxes based on this technology and bring them to market in time for the 2004 holiday season.

Gates then unveiled the Xbox®
Media Center Extender Kit, which combines a dedicated remote control with software that extends the Windows XP Media Center Edition experience throughout the home, allowing consumers to enjoy music, recorded television and photos from their PC using their Xbox game console. Noting that Xbox enjoyed a successful holiday season, Gates announced that the game console is on track to meet its shipment forecast of 14.5 to 16.0 million worldwide by June 2004. Xbox Live (TM) continues to fuel excitement for the platform, with more than 70 games available on the service. This holiday, gamers broke Xbox Live records by playing more than 1 million game sessions per day over a five-day period.

The presentation continued with a demonstration of the first Portable Media Center device from Creative Labs Inc., which makes it easy for people to take their favorite photos, music and home videos with them wherever they go. Gates also revealed that Napster LLC, CinemaNow Inc. and EMI Music are the first content suppliers to announce their support of Portable Media Center devices at launch. In addition, he noted the increased capabilities of Microsoft TV Foundation Edition 1.5, which enhances the consumer digital cable viewing experience by providing fully integrated support for high-definition television (HDTV) and digital video recording (DVR); and announced the arrival of high-definition video for Windows XP users, with 16 feature films being released as high-definition movies on DVD discs by a variety of publishers using Microsoft Windows Media 9 Series. (The movies offer video resolution of up to approximately six times that of today’s DVD video.)

“Digital entertainment is not just for enthusiasts any more — it’s a major part of everyone’s life,” Gates said. “Today, Microsoft is delivering the software that helps people easily create and share their digital memories, and enjoy amazing games and digital entertainment wherever they are.”

Noting the growing adoption of digital photos and video, Gates then demonstrated two technologies under development at Microsoft Research that explore new ways for people to interact with their digital media. The first project, code-named “Media Variations,” offers a novel way for people to explore large amounts of connected information. In the demonstration, Gates showed how users could find movies they were interested in based on the connections between them, such as common actors, directors or genres, and browse through them using a rich, three-dimensional interface. The second research project, code-named “MSR Media Browser,” offers a consistent and seamless interface that helps people find and work with “clusters” of photos and video on the PC, a digital picture frame or other device based on when the photos were taken, who they feature and other attributes.

Smart Watches Offer Information to Go

Demonstrating the expanding reach of software into new devices and services, Gates announced the retail availability of MSN Direct-ready Smart Watches from Fossil, Inc., and Suunto. MSN Direct, part of Microsoft’s Smart Personal Objects Technology (SPOT) initiative, enables people to conveniently and discreetly access the information that matters most to them with a glance at their wrist. The watches offer personal messages and appointment reminders, continuously refreshed news, weather and financial information, multiple watch faces and automatic time-zone adjustment.

Gates showed how people can easily configure and personalize their watches through the MSN Direct Web site (http:// ), demonstrated a forthcoming sports information channel and noted how advanced software is making it possible to deliver the information people need is available on stylish and comfortable accessories that suit their changing needs.

The MSN Direct service is now available in more than 100 of the largest metropolitan areas in North America. The watches are available for purchase at and at manufacturers’ Web sites, and will soon appear in major retail channels that include Federated Department Stores (such as Macy’s and Bloomingdale’s). The watches retail for $129 to $299 (U.S.); MSN Direct service is available for $9.95 a month or $59 a year.**

Gates then highlighted the momentum behind Windows Powered Smartphones, noting that research firm IDC predicts that more than 20 million converged mobile devices will ship worldwide in 2004, an increase of over 133 percent from 2003. He predicted a bright future for automotive-based computing systems (“telematics”), with Microsoft’s first Connected Concept Cars on display at CES, a growing number of devices shipping with Windows Automotive technology, and the arrival of hands-free Pocket PC operation through the recently launched Microsoft Voice Command software.

New Opportunities for Software

Gates concluded his presentation with an upbeat view of the consumer electronics industry in the coming year, noting that the convergence of PC capabilities with consumer electronics devices is leading to greater choice and convenience for consumers and new opportunities for PC and consumer electronics companies. He emphasized Microsoft’s continued commitment to working with the industry to enable new experiences in home productivity, communications and entertainment, and predicted that 2004 would bring broader mainstream consumer adoption of a wide range of “digital lifestyle” technologies.

“The innovation taking place in the PC and consumer electronics industries is delivering on the promise of the Digital Decade, with new technologies, devices, applications and services that will make computing a central and exciting part of everyday life,” Gates said.

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and Internet technologies for personal and business computing. The company offers a wide range of products and services designed to empower people through great software — any time, any place and on any device.

* Promotional offers only available to new subscribers, in the 50 United States, the District of Columbia and Puerto Rico. After the trial period (if any), the then-current price for your MSN plan will be automatically charged to your credit card until you cancel your account or select an alternative plan. You must agree to the MSN Subscription Agreement to access the service. A major credit card is required. MSN is available only for personal noncommercial use. Internet access service not provided; you must have existing Internet access service. No refunds on prepaid plans, unless cancelled within 30 days. MSN 9 Details: For users of Windows 98 or later operating systems only. Prices subject to change. Additional terms may apply.

** You will need a subscription to the MSN Direct service to take full advantage of all watch features. Subscribing to MSN Internet Software or MSN Dial-up is not required to access MSN Direct. MSN Direct is available to residents in the 50 United States, the District of Columbia, and Canada. To receive MSN Direct on an MSN Direct-ready device, you must be within an MSN Direct coverage area; check the current coverage maps available at http:// . Internet access is required for the on-line activation of your MSN Direct account. A major credit or debit card is required. Activation and service charges will apply. Following your trial period (if any), the then-current price for the standard monthly or annual prepaid MSN Direct service plan will be automatically charged to your credit card until you cancel your subscription. Prices are subject to change. Regular charging of watch is required for use. SAFETY FIRST: Watches can be worn anywhere, so use the service sensibly and safely.

Microsoft, MSN, Windows, Outlook, Hotmail, Windows Media, Xbox and Xbox Live are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

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