Gates speech highlights smart gadgets

Bill Gates kicked off the Consumer Electronics Show in Las Vegas Wednesday evening by unveiling the first products based on a futuristic technology that can turn everyday items into "smart objects" that receive information through the airwaves.

Three leading watch makers will offer wristwatches by the end of the year that make use of the smart technology, which uses a part of the FM radio spectrum to feed the devices with a low-bandwidth but continuous stream of data, the Microsoft chairman and chief software architect said.

The technology can deliver what Gates termed "glanceable" information to the devices, such as a weather report, news about traffic conditions or short text messages from friends. He also showed a magnetic device that can be stuck to a refrigerator or a car dashboard to display sports results or a stock ticker.

"It gives you only the information you've selected," he told a packed hall of show-goers here. "We're not trying to put a PDA on your wrist, we're not trying to put a supercomputer on your wrist. We're trying to give you just the information you need."

Called Smart Personal Object Technology, or SPOT, the technology was developed by Microsoft's research group and is the culmination of developments in silicon chips, networking and software technologies, Gates said. It was first discussed at the Comdex trade show here in November.

In a speech laden with demonstrations, Gates also showed a "personal video recorder" being developed with Intel Corp. called Media2Go. The reference design is for a portable device with a four-inch (10-centimeter) screen and a 30G-byte disk drive that plays video and music downloaded from the Internet or from a PC with a television tuner.

Hardware partners including Samsung Electronics Co. Ltd. and Sanyo Corp. are expected to offer products based on the reference design by the end of the year, Gates said.

To keep the crowd at the Hilton Hotel amused, basketball star Shaquille O'Neal was beamed in from Los Angeles to battle Gates in a demonstration of Xbox Live, Microsoft's online gaming service, and to show off a new Xbox game, Midtown Madness 3.

Overall, the speech highlighted Microsoft's broad efforts to get its software into every corner of consumers' lives, from DVD players and video game consoles to smart phones, wireless displays and even sewing machines. In true Las Vegas style the company is placing multiple bets with its software, knowing that if only one of them pays off it could reap great financial rewards, one analyst said.

"I have a lot of respect for them because they take a lot of risks, and they are lucky because they have so much cash that they can afford to do that," said Michael King, a senior analyst with research company Gartner Inc. "But it's tough to be the guy that's good at everything, and they're spreading themselves very thinly."

King was skeptical of the smart object technology. The cost of implementing it and the absence of any real need for it means the technology will likely remain on the fringe for the next few years, according to King, who noted that the Linux operating system might provide a more viable option because it is free.

"We spend a lot of time in this industry figuring out how to do things and showing we can do them, but we have to stop sometimes and ask whether there's really a need for it," he said.

The Microsoft chief also highlighted momentum around Windows Media PC, announcing that Toshiba Corp. will use the media-friendly software in a new laptop computer aimed at students. ViewSonic Corp., best known for its computer monitors, is also jumping on board with a desktop PC based on the media-friendly OS, Gates announced.

He also showed the first shipping DVD player to play disks that use HighMAT, a technology it developed with Panasonic for storing photos, music and video clips created on a PC on recordable disks such as CD-R and CD-rewritable. The technology makes it easier for consumers to sort through the content and find what they're looking for when they play it back through the DVD player.

He also showed a prototype DVD player from Polaroid which will be the first that can play movies created using Windows Media Video 9.

The Microsoft chief also highlighted momentum behind Windows CE and Windows XP Embedded, showing the Bernina Artista 200E sewing machine, which combines computerized stitching and embroidering with the ability to download patterns from the Internet.

But it was the SPOT technology that clearly excited Gates the most. He called the FM network that delivers information to the devices "DirectBand," and said it could lead to a host of new services that would be beamed to devices running Microsoft's .Net Compact Framework software.

The chip used in the devices runs at just 28MHz, and the watches shown here had 512K of ROM (read only memory) and a small amount of RAM (random access memory). That makes them only slightly more powerful than the components used in the first IBM Corp. PC, Gates said. The content sent to the devices is written in "a form of BASIC somewhat like the BASIC that ran on the early PC," he said.

"That data gets translated into .Net byte code and is sent down the network to the device," he said.

Microsoft for the past year has been quietly talking to the 100 largest FM radio stations in the U.S. about licensing a small portion of their FM radio networks, according to one industry source here. It plans to use it to download small software updates to the devices when they are required, the source said.

Gates acknowledged that the technology will require a great deal of cooperation among technology providers and service operators, and admitted that security and privacy issues need to be addressed. He said each device will have a "unique key, and the information sent to the watch is encrypted so only your watch will receive your personal information."

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