New technologies smarten everyday objects at CES

LAS VEGAS — Microsoft makes most of its money selling software for plain old personal computers, but you could hardly tell that was the case from the gizmos Bill Gates unveiled last night at the annual Consumer Electronics Show (CES).

In opening the show, Gates highlighted phones, wristwatches, a sewing machine, an exercise bike and a portable movie player, all involving technology from the PC-centric company.

Gates said people may be underestimating the potential of new computerlike devices and services that will extend computing power in what he called the current "digital decade."

"As they've seen some of the dot-com promises not come true, I think they're missing the fact the basic technology is moving forward. The new platforms are here, and the vision of that digital decade will be a reality," he said.

Gates' speech was his fifth keynote at the world's largest consumer-technology trade show, running through Sunday at the sprawling Las Vegas Convention Center.

Gates also demonstrated new portable, wireless computer display screens called Smart Display and new laptops running Microsoft's Media Center software. But the stars were gadgets that broaden his company's reach further beyond the PC.

One reason for the push is consumer electronics are a huge new market for Microsoft. The industry is expected to see sales of $96.2 billion in 2002, up 3.7 percent from 2001, according to the trade show's producer, the Consumer Electronics Association.

The market's health is reflected in the show's growth. While the computer industry's centerpiece trade show, Comdex, has shrunk in recent years, CES expected its largest turnout ever, with more than 2,000 companies filling 1.2 million square feet of space.

Microsoft is moving into nearly all of the key product areas on display. The company is here promoting versions of its software for car stereos, televisions, DVD players, wireless home networks, video games and, of course, PCs.

Gates also showed off the MSN 8 Internet service and Xbox Live online game network by playing "Midtown Madness" online with Los Angeles Lakers star Shaquille O'Neal.

The wristwatches are the debut of an initiative Microsoft calls "Smart Personal Objects Technology," or SPOT. Computerlike power is added to common devices, using bits of software that allow devices to read and display real-time information.

As if by magic, the watches set themselves and adjust to different time zones. Users can download different watch faces and sign up for services that deliver news, weather, sports and other data read on the display screens.

Microsoft developed the designs and the infrastructure, but the watches will be sold, starting next fall, by watch manufacturers Fossil, Suunto Oy and Citizen.

To make the watches work, Microsoft licensed little-used portions of the FM radio spectrum in the United States and Canada from broadcasters.

Microsoft will send a steady stream of data to the watches over the broadcasters' networks, making the special services available wherever FM signals exist.

SPOT technology may also power alarm clocks, refrigerator magnets and other devices. It is designed to accomplish several goals for Microsoft:

• Allow users to access computer data in different locations and on different devices.

• Provide opportunities for programmers using Microsoft software to build new applications.

• Provide a new opportunity for Microsoft to sell subscriptions to data services.

"The most long-term exciting technology is SPOT because it has a potential to change our lives and change them dramatically," said Rob Enderle, a Santa Clara, Calif.-based analyst with the consultants Giga Information Group.

Enderle said SPOT is one way PC technology may be headed, toward specialized devices "that do one thing and one thing incredibly well."

The devices are also useful, he said. For instance, they could warn someone if a terrorist attack was expected in a region the person was approaching.

"It has a lot of potential, particularly in today's world where we often need very location-specific information and we need it immediately," Enderle said.

Several other devices Gates displayed are based on stripped-down versions of the Windows operating system already used in such equipment as cash registers and ATMs.

A Bernina sewing machine includes a version of Windows that powers a small display, stores various automated stitches and enables the user to download stitches and patterns from the Internet.

Similar software in the Exertris "Interactive Exercise Bike" enables users to play games or listen to digital music while they pedal away pounds.

Windows also powers a portable media player code-named "Media2Go." Sanyo, ViewSonic, Samsung and iRiver are expected to begin selling the devices in the fall for less than $500.

Media2Go has a 4-inch color LCD display screen and hard drives ranging from five to 20 gigabytes. It runs the Windows CE operating system on a special Intel chip set and uses the new Windows Media software to compress, store and play movies, music and TV shows.

Users will be able to download 10 to 20 hours of digitally recorded TV shows or videos and digital music to enjoy on the road.

Microsoft timed several of its product announcements so it would be in a strong position to discuss new software deals with consumer-electronics hardware companies at the show.

It announced Tuesday it was cutting the price for hardware companies to license its software for recording, playing and storing digital music and video.

Microsoft also is making deals with companies to manufacture additional devices based on the SPOT technology behind the watches Gates displayed.

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com.