BILL GATES RETURNS TO KICK OFF THE 2006 INTERNATIONAL CES WITH HIS VISION OF THE YEAR AHEAD IN CONSUMER ELECTRONICS

Under Gates' guidance, Microsoft continues its stronghold as the worldwide leader in consumer electronics through the design of groundbreaking technologies that lead to innovation in every aspect of human endeavor.

Keynote Remarks by Bill Gates, Chairman and Chief Software Architect, Microsoft Corporation
2006 International Consumer Electronics Show
Las Vegas, Nevada
January 4, 2006

ANNOUNCER: Ladies and gentlemen, Chairman and Chief Software Architect of the Microsoft Corporation, Mr. Bill Gates. (Applause.)

BILL GATES: Thank you. My wife and I were certainly thrilled to be named persons of the year for our work with the foundation, and to share it with Bono. The competition, I'm sure, was quite rough, as it always is. Kids probably would have voted for J.K. Rawlings. I'm sure Mother Nature was a choice that almost got it. In fact, probably if there had been one more hurricane, Mother Nature would have been on the cover. For a lot of reasons, I'm glad that didn't happen.

Another past winner was the PC itself; all the way back in 1982, it was recognized that this was something phenomenal, that this would really change the world. And that was when the PC was just at the beginning. Microsoft had MS-DOS, we didn't have graphics interface, and we had just started to build up the software industry around the work that we're doing. And over the last 24 years, it's been quite phenomenal what's grown out of that. And what I want to share tonight is a little bit of glimpse of how that will keep revolutionizing itself, and moving faster than ever before with the magic of software connected to the innovation of our partners.

The Digital Decade

Now, we talk about this as the decade of Digital Lifestyles, the decade of Digital Workstyles. That means that all these tools are becoming mainstream. And it's not just one application that makes it happen. It's not just banking or advertising, or filling out your tax return, or even instant messaging, it's the fact that as you adopt those things they really go together, and it becomes more and more familiar to work in that fashion.

2005 was a very big year. A big year for the personal computer, growth of over 11 percent in Windows PCs, a big year with the introduction of the Xbox 360 that we've been building up to for over five years. But this next year, in some ways, is probably even bigger. This is the year that [Windows] Vista, Office 12 and many other products will come out, and the realization of [Windows] Media Center as a volume mainstream product will really be clear to everyone in the marketplace. Consumers are getting more and more connected. They're getting richer experiences, and software is really at the center of that.

I thought I would start off and show a scenario that we think will be real by the end of the Digital Decade, so within the next four years or so, this will be something we think will actually be realistic. Let's start off, let's say we're at home in the morning. We've got a screen here that shows some of the information that we care about. It comes up and it's kept up to date. We just touch it. We've got some of the kids' drawings here. We can just grab those, move those around, pick different pictures that we want. We see the time of day here. All very simple to work with.

Down here we've got a little bit of a map, and because everyone in the family has decided that they're willing to share their location with the rest of the family, we can see here on the map where mom left early and headed off to that soccer game. We see the family schedule there. So, we're able to track everybody and know what's going on. Here we've got a connection up to our video, and so the latest news information has been categorized. It picks the ones that would be of interest to us, and it actually lets us navigate. So, here I can pick a particular show, news item, that's relevant to the work that I do, and I can see there's been a storm here, it's interrupting the supply chain of a lot of different companies, probably including mine. That could be a real challenge. So, I'll click this button here and say, I would like to track that topic. I would like to continue to watch that video clip, and so as I head in to work that video has now been connected up to my cell phone, and I can watch that as I'm getting into the car and heading off to do my work.

When I arrive there, I've got a nice desktop screen. You can see it's got a lot of area. We think this will be very important. You want to have more information that you can just glance at and work with in a very simple way. The idea of a big screen that uses your full field of vision makes sense to us. Now, of course, instead of using a password, I'll just use my fingerprint here, so I'm authenticated in a more reliable way. I see a lot of different information here, including that news story that I was tracking. I go ahead and set up a little conference call that's going to have a lot of people talking about this problem. And so we can see here our Chief Operating Officer is online, our VP of Operations is only connected up through voice. We're talking through the issue. There is the article there, people are annotating that, seeing how it affects us. I've actually got here on my Tablet PC, that's really logically just part of this screen one PC. I've got a little chart here, and so what I would like to do is go ahead and go in and select that, say, OK, this is a chart that I think is relevant, and I can drag it up here, I can either move it to my desktop, or I can move it into this video conference. So, I'll go ahead and drop it there, and we'll sit and talk about this thing. And say, OK, what's going on with it.

It was actually created, I can see, by Thomas Anderson, and so I'm interested in bringing him into the conversation we have here. So I go off and select him, and say that I want to do instant messaging in a side conversation. We're talking to him, and I indicate, hey, you really ought to come in and give us some advice. I can simply drag him over into the conversation, and so he's there. He's now part of that, so not only do we have his document, but we have his advice, and we figure out pretty quickly what needs to be done.

And actually as we get towards the end of the call, I notice that it's been looking at the traffic in my schedule, and it says there's a traffic jam, so I'm going to have to leave a little bit earlier to get to the airport. I've got a flight today, and actually it puts that right here on my telephone as well, along with the map, suggests an alternate route, so I can grab onto this, and take that with me as I leave work.

Later that day, I find myself in the airport, and all I've got with me on this particular trip is my phone. And yet I'm very interested I figuring out what's the latest, what's going on. And so I can take my phone here, and I just put it down on a table that's here in the airport lounge, and it recognizes it. It's got a little camera here, and a little Bluetooth, nothing very complicated with the magic of software behind it. And it says it wants me to authenticate that this is really me, my phone. So, as soon as I put my fingerprint there, I'm connected up, and I actually get a full-sized desktop. And so now, if I want to read mail, or browse, that's all there. Actually, what I'm going to do is take a business card that somebody handed me while I was on this flight, and just put that down on the table there, and the camera scans that, detects it's there, recognizes it, I'll just flip that over, I've got a little note I made when I was talking with this person about some information they would like to see, and it sees that, gets that text, and then I can take that and say, OK, go ahead and put that into my contacts. So, as I drag it up there, I can see the information being connected up and put down into my phone. So, now I have a reminder of a task, send him that information, and see his picture, his name, his e-mail, it's all been added to my contacts list there.

Well, that's pretty nice, I'll take that off and go ahead and look at whatever mail has come in. In fact, I see that Thomas when we were working there in the office has got a press release and here, because it's very critical they know I'm agreeing with what they've got here, again, I authenticate that this is me, and I make my digital signature available because of the fingerprint there.

Now, that that's sent off, here I am, I'm able to do anything I want, I can see up in the right-hand corner through my calendar it knows the flight I'm taking, so it's showing me exactly how much time I have before I have to leave, so I can work here and get the benefit of the full screen, even though this phone normally just has that small screen. When I'm done, I just pick this up, and of course it's smart enough to recognize now that it's logged me off, and somebody else can come in here and use this and that's just simply available to them.

So, it's a very simple thing to have all these devices working together, and I have that Digital Workstyle, my calendar, the traffic, my contacts, my rich communications done in a very different way.

The phone is very different, the idea of meetings is very different, the way we collaborate, we're able to share across different companies, it's all very different, and that's because we've taken software and put it at the center, the digital approach applied to all of those activities.

Well, we see that in so many areas. I think five or six years ago, if you'd said to people that software would be incredible in terms of making photos better, music better, TV better, phone calls very different, they would have been quite skeptical, they would have thought how can software do that.

Well, now particularly in music, to some degree in TV, they've seen that it makes a huge difference. It allows them to pick the things that they're interested in, it allows them to see it when they want to, to share with friends what they've seen and what they like.

And so this really is the symptom of the great progress we have here in the digital decade.

Software: Make Things Simpler and More Effective

The PC sales growth with Windows PCs exceeding any expectation this year was a great example of that, more relevance, more things that are going on there. Broadband was a luxury only three or four years ago, and now has actually overtaken dial-up, and we're getting over a hundred million broadband users here in the United States and we'll have 80 percent of all online households broadband by the end of the decade. And the U.S. is not even the leading country in that respect, all the developed countries moving very quickly.

So what does it mean? It means that software will come in and make things both simpler and more effective. Picking the music that you want, finding out other things by that artist or similar artists, not having to think about disks and putting them in the case; entertainment, finding the things that are great, seeing them when you'd like to, having a digital jukebox so anywhere in the house you can call up the movies that you own and see those exactly when you want to; photos, organizing not just photos but all the memories of your kids growing up, being able to search those, send them off to relatives, have them appear on various nice screens around the house like that one I had in my kitchen in that scenario I showed; communications, not just with the voice but also with the screens connecting people together, letting them annotate documents, work together in a very rich way: These are scenarios that people can understand, if we make them simple, we make them inexpensive and we drive them through a single interface, everything you learn, the concepts for one activity, whether it's gaming or office productivity get applied across these different activities.

Software for the User

Likewise, these things need to work across all the different devices. So it's not just software for the PC or software for the phone or software for the videogame, it's software for the user. And my preferences, my interests, like how I charge things or the news I care about or who my buddies are, all of those things are reflected on those devices. As I move between devices, the people I've chosen to share my presence with becomes available to them. A friend can see, if I want, what game I'm playing and say they might want to play with me, ask me to join in and do something else; if I'm on my PC working, they can notify me that there's a contest coming up, something that they'd like to engage me in. Even watching TV, the ability to chat with your friends while you're watching the same show or different shows should be something that's very straightforward.

So this cross-device approach is a very, very important approach. In fact, that's complemented by the fact that there will be what we call Live services where a lot of your files, your information will actually be stored out in the Internet, and even if you pick somebody else's device up, once you authenticate, all that information becomes available to you. So moving between different PCs can be a very, very easy thing.

There's a lot of themes there, themes of personalization, themes of empowerment, themes of everything moving to the Internet. What is telephony moving to the Internet? That's voice. What is TV moving to the Internet? That's Internet TV or IPTV. People have to have confidence in these things, automatically backed up, security built-in, very reliable systems that use the cloud storage for those kinds of guarantees, and easy connections, connecting to people, connecting up to devices, a very strong way of driving through all these different scenarios and making them very simple.

In sum, it's very revolutionary, but every year we have big milestones, more adoption, and it only really catches up to us in terms of how it's changed the world of media, changed how the business models work there, changed the way that magazines and newspapers are delivered, changed the way that entertainment gets done, bringing these new interactive elements in; TV, where we've picked the new segments we want, we interact with a learning show, we can find the video that wouldn't have been available in a broadcast system; all of that is becoming very, very mainstream.

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