At a much-touted duel of tech-industry icons in Carlsbad, Calif., tonight, Apple Chief Executive Steve Jobs is expected to brandish the iPhone, but Microsoft Chairman Bill Gates will also have some new firepower at hand.

Gates' company has been working for almost six years on a new category of computer that has no keyboard or mouse, relying instead on gestures and touches to manipulate content on the screen.

Microsoft Surface, as the product to be unveiled today was hastily dubbed, will blur the lines between the physical and the virtual, company executives promised.

It aims to provide a new, more intuitive way of interacting with computers — something Microsoft and other companies have pursued on several fronts for years.

The Surface looks like a sleek, modern coffee table with a flat screen sunk into the tabletop. Infrared cameras under the acrylic surface can recognize objects and hand gestures, eliminating the need for a mouse or other means to interact with the computer.

Several people can use the machine at the same time to play games, browse and share pictures and music, order drinks and food in a restaurant or compare products in a store.

The Surface can process multiple inputs at once, a feature called "multi-touch."

"I think it's one of those products that when you see it and use it, it definitely has a cool factor and you sort of immediately get it," said Matt Rosoff, an analyst at Directions on Microsoft in Kirkland who previewed the product.

Rosoff and others noted that it's difficult to conceptualize the product without seeing it, however.

Microsoft had planned to introduce Surface in mid-June but moved its announcement to this week's "D: All Things Digital" conference, hosted by The Wall Street Journal.

The event features a rare joint onstage appearance by Gates and Jobs, who will tout the iPhone, another sleek consumer product due out in June that also boasts a "multi-touch" user interface.

Microsoft CEO Steve Ballmer is scheduled to introduce the Surface earlier in the day.

"We decided that this was a great opportunity," Pete Thompson, general manager of the Surface Computing group at Microsoft, said during a demonstration of the product last week, when it was still called by its code name, "Milan."

The tables should start to appear by year's end in Sheraton Hotel lobbies and lounges; Harrah's resorts and casinos; and T-Mobile retail stores, Microsoft said.

They will also be available through International Game Technology, a major computerized gaming manufacturer and marketer.

Harrah's sees potential

Tim Stanley, senior vice president of innovation, gaming and technology at Harrah's Entertainment, first saw a prototype about a year and a half ago and immediately thought of several places it could fit into the company's casino and resort properties around the world.

The company is working on its own applications now because the Surface doesn't do much right out of the box.

"It's like a computer in the sense of 'What [software] are you going to put on it?' We'll try a bunch of things," Stanley said.

One application would act as a "virtual concierge" to help VIP customers find amenities and attractions at Harrah's various properties.

Stanley sees it as a way to help differentiate Harrah's offerings among tech-savvy high rollers.

"It serves a purpose certainly in Vegas," Stanley said.

Other applications would allow people to place orders by touching digital images of food and drinks, participate in contests and promotions, and play trivia games.

"In time we believe and hope there will be some interesting new or traditional forms of casino gaming on there," Stanley said, adding that gambling is heavily regulated and it can take some time to gain approval for new gaming concepts.

Harrah's plans to start with deployments in VIP lounges and clubs of about four of its most-famous Las Vegas casinos, including Caesars Palace. Stanley said Harrah's has rights to about 50 of Microsoft's tables and expects them to start arriving in larger numbers early next year.

Innovation points

A product of Microsoft's research and hardware groups, Surface is earning the company high marks for innovation after a development process that started in 2001 with the proverbial napkin drawing.

"I'm personally impressed," said David Daoud, an analyst with research firm IDC. "I sort of regained a little bit of confidence in [Microsoft]. ... With this product they're showing that 'we're capable of innovating as well.' "

An early prototype in 2003 used a table from Ikea, but don't expect to find a surface computing product for consumers for sale there, or anywhere else, anytime soon.

Despite receiving lots of questions about a living-room version from early viewers of the product, Thompson offered no specific details on the company's plans beyond this first version. He did say there was a potential "multi-billion-dollar" market for surface computing.

"The company believes this is going to be a very big deal," he said.

But if Microsoft doesn't get this initial launch with commercial entertainment companies right, it could slow down growth of the entire market, he added.

Microsoft Surface will cost between $5,000 and $10,000. Thompson would not disclose where or by whom the product will be manufactured.

Gauging demand

The actual demand for surface computing is hard to gauge because the category doesn't really exist yet. Daoud said explaining the concept will require tremendous effort by Microsoft, but once people see it and play with it, they tend to understand it immediately, he said.

"If any company has the ability to do that, it's a company that has billions of dollars in the bank," Daoud said.

More than 100 employees at Microsoft work in the Surface Computing group.

Thompson's family has been playing with a unit for several months, but he said Bill Gates has asked when he'll be getting one.

"He's probably going to get the one I have in my house," Thompson said. "I think he's going to get it rather quickly."

Benjamin J. Romano: 206-464-2149 or bromano@seattletimes.com