Bill Gates Looks Ahead at "Next Digital Decade"

LAS VEGAS - Jan. 6, 2008 - At the 2008 International Consumer Electronics Show (CES), Microsoft Corp. Chairman Bill Gates and Microsoft President of the Entertainment & Devices Division Robbie Bach today unveiled several new entertainment services and partnerships, including new deals with Disney-ABC Television Group, NBC Universal and Metro-Goldwyn-Mayer Studios Inc. (MGM), that demonstrate how software is improving people's ability to connect with their favorite content and communities through new and expanded forms of entertainment experiences.

In his 11th CES opening keynote address, Gates looked at the sweeping changes since 2001 that have created the first true Digital Decade, including the continued expansion of the popularity of Windows-based PCs, the growing prevalence of broadband networks, the spread of mobile phones and the advent of portable digital media devices.

"Since I first started talking about the Digital Decade in 2001, the speed with which digital technology has become central to the way we work, learn and play has been amazing," Gates said. "But in many ways, we are at the very beginning of the transformation that software will enable. During the next Digital Decade, technology will make our lives richer, more connected, more productive and more fulfilling in profound and exciting ways."

Gates went on to outline his vision for the next Digital Decade - an era in which dramatic advances in hardware and software will make the power of computing a ubiquitous part of day-to-day life. Gates referenced how natural user interfaces will more closely reflect the way people interact with each other. High-definition experiences will be nearly everywhere. Services-connected devices running on the Web and huge amounts of storage accessible via the Internet will mean that information and capabilities people want will be available instantly and seamlessly, no matter where they are.

Partnership With NBC Universal for the First "Long-Tail" Olympics

A joint Microsoft-NBC Universal announcement provides just one indication of the power of software to change the way people experience online entertainment. NBC Universal and Microsoft will raise the bar for live and on-demand Internet broadcasting through an exclusive agreement where Microsoft and NBC will deliver NBCOlympics.com on MSN, the official U.S. online home of the 2008 Summer Olympics in Beijing. In the first "long-tail" Olympics, online viewers will have access to more than 3,000 hours of live and on-demand content so they can watch their favorite athlete or sport, regardless of whether the sport has seven fans or 7 million. NBCOlympics.com on MSN will be available free and powered by Microsoft Silverlight technology, a cross-browser, cross-platform plug-in for delivering high-quality video experiences on the Web.

"With Microsoft's cutting-edge technology and MSN's enormous reach, we will be positioned on NBCOlympics.com to enable Olympic fans to tailor their Olympic online viewing experience - they can watch Olympic sports content when and where they want," said Gary Zenkel, president of NBC Olympics. "An on-demand Olympics means online viewers will be able to return to their favorite Olympic moments over and over or watch a performance they may have missed for the first time."

Hit ABC and Disney Channel Programs Join Xbox Live Video Lineup; MGM Brings Legendary Library of Films to Xbox LIVE

Bach announced that hit TV programs from ABC Television and Disney Channel will join the Xbox Live programming available for download directly to the Xbox 360 console. In addition, MGM will bring its library of hit movies.

Under the agreement with Disney-ABC Television Group, later this month, all U.S. Xbox LIVE members will begin to have access to select TV shows and movies from the ABC Television Network, ABC Family, ABC News, Disney Channel and Toon Disney as part of an agreement with Disney-ABC Television Group. More than 500 hours of content, in both standard definition and high definition when available, will be offered including hit ABC Television shows "Lost," "Grey's Anatomy," "Ugly Betty" and "Desperate Housewives." Past and current ABC shows will be available on demand, with new episodes arriving on the service the day after they air on television.

Under the agreement with MGM, Xbox 360 will offer MGM's legendary movie library on demand for Xbox 360 including such titles as "Rocky," "Terminator," "Legally Blonde," "Silence of the Lambs" and "Barbershop." United Artists, an MGM sister company, will also make select films available on demand.

With more than 10 million Xbox LIVE members and more than 3,500 hours of premium content, Xbox 360 has established itself as a premier platform for on-demand TV shows and movies, including impressive high definition experiences, for TV.

"Xbox LIVE Marketplace is the destination for high-definition movies, TV shows and music videos," Bach said. "And, with the new Disney-ABC and MGM partnerships, we are bringing even more compelling high-definition content to people through their Xbox 360."

According to Bach, the continuing success of Xbox is another indication of the power of digital technology to transform the way people access and experience entertainment of all kinds. Sales of 17.7 million consoles this holiday season surpassed original expectations and put Xbox 360 on track to register the biggest year in video game history as U.S. consumers spent more on the Xbox 360 platform in 2007 than on any other gaming platform.

"With its continued momentum in games, accessories and digital entertainment via our leading online service Xbox LIVE, and record-setting games and accessory attach rates, evidence is everywhere that Xbox 360 is thriving," Bach said.

Zune to Launch in Canada; Zune Social Grows Rapidly

Adding to the entertainment momentum, Bach announced that Zune will be available in Canada in spring 2008, the first time the family of digital music players will be available outside the U.S. Microsoft also announced that since the November launch of Zune Social, more than 1.5 million people have joined the music-focused social network, demonstrating how Zune is tapping into consumers' desire to share their musical passions with their broader community.

Windows Vista Hits 100 Million Licenses; Shows Latest "Fashion" PCs

During the keynote, Gates talked about the ongoing transformation of the personal computer and he shared sales figures for Windows Vista that indicate that the PC and the Windows platform remains a central catalyst for the advances of the Digital Decade. According to Gates, the company has sold more than 100 million Windows Vista licenses to date.

"For more than 25 years, Windows has unlocked the power of personal computing," Gates said. "Now we are expanding Windows to go where you want to go and do what you want to do on PCs, the Web and mobile devices. The result is connected experiences that extend across people's lives, interests and communities, at home and at work."

In addition to technology advances that continue to make PCs more powerful, more portable and more affordable, there is a growing emphasis on style. Independent research firm Forrester Research Inc. has predicted that the period between now and 2012 will be the "Age of Style" for the consumer PC industry, with "strategists and marketers weaving design concerns into their thinking about every facet of their company's strategies as style and design becomes a critical brand attribute." ("The Age Of Style In Consumer PCs," Forrester Research, June 25, 2007). Examples from several hardware manufacturers were shown in a video during the CES keynote, including these:

ASUS-Lamborghini VX3. Available in the first quarter of 2008, this PC is ultrathin and lightweight, and comes with a 12.1-inch-wide LED backlit panel and premium leather-bound palm rest with exquisite stitch detailing reminiscent of that in a Lamborghini automobile.

Lenovo IdeaPad U110. Available in January 2008, this super-slim notebook weighs just over two pounds and is embellished with a tendril texture etched into a red metal cover and includes a Dolby Home Theater system and optional Solid State Drives.

New IPTV Experiences; Microsoft Mediaroom Now on 1 Million Set-Top Boxes

Other announcements highlight the ongoing impact that digital technology and software plus services are having on the way people experience television. Showtime Networks Inc. and Turner Broadcasting System Inc.'s TNT and CNN networks all introduced new TV applications capable of delivering the most advanced digital TV services on the Microsoft Mediaroom Internet Protocol Television (IPTV) platform, which is enabling over 20 of the world's leading broadband service providers to deliver advanced digital TV services.

Examples of innovative new television experiences include the ability to view NASCAR Sprint Cup Series races from the driver's vantage point by choosing from a series of in-car cameras on broadcasts by TNT; to watch boxing matches by selecting different camera angles and audio feeds on Showtime; and to access the richness of CNN.com's 2008 presidential election coverage while watching CNN's television broadcast.

Microsoft also announced that Mediaroom is now running on 1 million set-top boxes worldwide and unveiled a new offering called DVR Anywhere, giving customers the flexibility of watching their recorded programs on multiple TVs in the home.

In addition, Microsoft announced that Samsung Electronics Co. Ltd. will support Extender for Windows Media Center, enabling televisions to stream HD content from any Windows Vista-based PCs with Windows Media Center over a wired or dual-band Wireless-N home network. This partnership builds on strong momentum and a growing set of online services, including the recent beta release of Windows Media Center Internet TV, which offers more than 100 hours of ad-supported entertainment from MSN Video, including full-length shows, music concerts and movie trailers.

New Interfaces Drive Future of Computing: Speech, Vision, Touch and More

Examples of the growing prevalence of more natural user interfaces were also on display during the keynote. Bach previewed a new version of Tellme, Microsoft's integrated voice-and-visual mobile service that enables people to use voice commands to say what they want and see the answer on their phone's screen. The new service uses Global Positioning System (GPS) capabilities to identify the caller's location, yielding results that are significantly more relevant. Tellme is available today on AT&T Wireless and Sprint phones and will be available in future versions of Windows Mobile.

For example, a person can "call" the Web on a mobile phone and say "movies" and the software will recognize where the person is located and send to that mobile phone's screen a list of the theaters closest to that location. Furthermore, Microsoft gave an early glimpse of how future versions may also offer the ability to purchase movie tickets from a mobile phone and share the movie information with friends and family via a text message.

Bach also demoed voice-activated technology for the car, including Sync, a fully integrated in-car communications and infotainment system for mobile phones and digital music players that has been available in select Ford models since September. Ford Motor Co., which expects to sell more than 1 million vehicles with Sync by early 2009, unveiled the new 911 Assist feature that connects drivers with emergency services in the case of an accident or emergency.

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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