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Gates makes case for Windows in consumer world

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CES Bill Gates headed a Microsoft executive line-up before the consumer and entertainment industries on Wednesday to make the case for adopting Windows in new devices and services rather than software from rivals.

Opening the annual International Consumer Electronics Show (CES) in Las Vegas, Nevada, Gates and co. outlined advances in graphics and search for the planned Windows Vista client operating system for gamers, music and photography enthusiasts.

Executives also highlighted growing market share gains for Windows in mobile devices such as mobile phones and the transition from "thought leadership to market share" for Microsoft's Xbox games console and related online services.

Gates was joined briefly on stage at CES by chief executive Steve Ballmer for a spirited game of EA Sports' Fight Night to demonstrate the power of the recently launched Xbox 360.

"Thirty years I've been training for this opportunity,” the chair-tossing Ballmer joked as he took on, and was "beaten", by Gates.

Driving home the message that Microsoft is increasingly a viable alternative to established consumer names, executives announced a range of hardware and services deals.

These included an online music download and subscription service developed with MTV for use with Windows Media Player, designed to lure music fans away from Apple Computer's iTunes.

Opening proceedings at CES, Microsoft's chief software architect Bill Gates used his traditional eve of conference keynote speech to highlight the growing importance of software in a range of consumer devices, from home phones to TVs.

"Consumers are getting more and more connected. Software is at the center of that. That's a scenario we think will be real in the next four years," he said. Software is "not just filling out your tax return or using IM," but helping consumers connect with each other and to receive the kind of entertainment they want.

Gates predicted 2006 would be a "big year [in] digital lifestyle" with the planned launch of Microsoft's Windows Vista, Office 12, new editions of Windows Media Center and Media Player, and growing adoption of the recently launched Xbox 360.

Microsoft played up the graphical look and feel of Windows Vista as a way to help make consumers feel at home with the planned PC operating system. Features include the ability to view all applications as they are running and to scroll through application and document Windows using a feature called Flip 3D.

Additional features include the ability to find applications by typing their name through in the Start menu and a side bar that displays RSS feeds that can be then be dragged into the main screen to be viewed in greater detail.

Windows Vista targets photographers with a Mac-style digital picture library and ability to search photographs using dates and keywords. Microsoft also promised improved graphics would make Windows Vista "awesome" for games.

Improved storage search and storage extend to music, with the ability to view album covers and to search list of titles, artists and album tracks through a re-designed Windows Vista Media Player interface. The new Media Player also becomes the front-end to MTV's planned Urge.com service consisting of two million tracks, more than 100 digital radio stations, information about song lyrics and which also provides the ability for users to develop personalized playlists.

In a nod towards the TV and film industries, Microsoft announced Windows Vista will be able to receive native digital cable signals meaning a consumer could - theoretically - buy a cable-TV-ready Windows Vista PC in the US. Microsoft also announced a partnership with US services DirecTV who will deliver TV content through Windows Media Center and a deal with the UK's BSkyB for video on demand through Windows Media Center for up to eight million subscribers. Microsoft claimed 6.5 million copies of Windows Media Center are in use today.

On Xbox 360, Microsoft claimed it is moving from "thought leadership to market share", being on track to ship between 4.5 million and 5.5 million consoles by the end of June - to meet demand, Microsoft is adding Celestica to its roster of Xbox manufacturers. Additionally, 50 per cent of Xbox 360s are connected to the internet.

That translates as market opportunity not just for games and peripheral companies, but also for entertainment and content providers according to Xbox executive Peter Moore.

He told CES that the demographic for Xbox 360 users is similar to that for viewers of popular TV shows CSI and The Office, while Paramount films has released trailers to the Xbox Marketplace, Microsoft's online Xbox shopping service.

According to Moore, 90 per cent of Xbox owners already owned or planned to purchase a high definition TV (HDTV) set during the next six months.

Gates, meanwhile, trumpeted the continued success of Windows on mobile devices and announced a counter to an early assault in the mobile device market from Apple's iTunes.

Touting Windows latest win, Palm's Treo 700w running Windows that was launched by Verizon Wireless this week, he announced a partnership with Motorola for a music and camera device code-named "the cube". Motorola has already worked with Apple to deliver the Rokr iTunes phone with Cingular Wireless.

More than 100 types of Windows-powered smartphones have been deployed by 90 operators in 55 countries; this year Windows will ship on more than five million mobile devices - a 36 per cent year-on-year increase, Gates said. ®

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