CES: Zero hour
Gates keynote details music service, HD DVD plans, and Xbox action.
By Brian Dipert, Senior Technical Editor -- EDN, January 5, 2006
Last night Bill Gates kicked off CES with his traditional opening night keynote. Plenty of other news-n-analysis sources will give you the complete details on the presentation (see, for example, the play-by-play from Microsoft employee and well-known blogger Robert Scoble). I'm going to focus on the things I find personally interesting and news that aligns with my earlier-described video-at-CES theme.
Generally speaking, the keynote was devoid of much of the glitz and forced humor that have marred past Gates speeches I've attended. The stage was pretty bare, aside from several PCs, displays, and an Xbox 360. Gates' presentation was similarly direct and down-to-business. In general, this stripping-down-to-the-essence was a good thing. However, it was almost too dry this time, in my opinion. Specifically, I confess that I missed the traditional beginning-of-keynote video clip. Although Gates often comes across as stiff when he tries to crack a joke on stage, on film he's usually quite hilarious. I particularly enjoyed his recent Napoleon Dynamite clip.
Gates opened the keynote with a demo that showcased the effortless and up-to-date flow of data and communications among home, office, and on-the-go environments. It was a somewhat futuristic forecast (Gates predicted that it would be widely implemented by the end of this "information decade"), although it employed technologies—and hardware and software products based on those technologies—that are already available. The key, of course, is gluing all those technologies and products together in a seamless interplay, a core strength of a Microsoft-based software world that the company has long emphasized.
There were plenty of obligatory references to, and demos of, the upcoming Office 12 application suite and Vista operating system (he explicitly said "we're gonna ship this by the end of the year"). I won't dwell too much in this area, except to say that I was impressed with the degree to which GPU-based graphics and video acceleration has been embedded to the core of Vista and, more generally, by how the polishing of the desktop GUI, IE browser (QuickTabs, for example, was pretty cool, even to this loyal Firefox user), Windows Media Player, etc. has modernized the look of the operating system. Shades of Apple's 'Tiger' OS 10.4? Sure. But Vista also does plenty of things that OS X doesn't do, at least at the moment, and don't underestimate the magnitude of the effort needed to develop an operating system that runs on a drastically broader hardware portfolio than Apple needs to worry about.
Microsoft and MTV Networks (which also manages VH-1 and Country Music Television) then formally unveiled their Urge music service. Like other PlaysForSure services based on Microsoft's DRM, you'll have the ability to either "permanently" purchase tunes or subscribe to an all-you-want subscription model (MTV claims to have 2 million tracks in its library). However, the companies didn't provide specific details on pricing and service availability.
I was struck by how MTV executive Van Toffler extrapolated the company's success in revolutionizing music videos 25 years ago (I'm feeling really old as I type these words) to how it hopes to revolutionize online music distribution now. Apple is clearly in the gun sights of Microsoft and its music partners, although analysts differ in their opinions as to whether or not the iTunes competitors are too late to make a major impact on business, in the face of the iPod pacesetter.
Anyway, Urge will exclusively reside within Windows Media Player, not as a separate client application (hint....that could be ported to other operating systems). As I watched the Microsoft-and-MTV lovefest play out on stage, I couldn't help but wonder what this relationship rollout implied about the fortunes of Microsoft's past showcased partners, such as Napster and Yahoo.
Gates then briefly touched on several other technologies he's showcased in the past. He remains upbeat about Tablet PCs, pointing to passive digitizers as a key means of continuing to decrease their incremental price versus a conventional notebook PC. He announced that the Windows Mobile-powered Treo 700w would be shipping the next day (and in fact, it is). And, in a shot across the bow of Skype, he revealed that Philips and Uniden were developing cordless phones that worked both with traditional POTS and with the Windows Messenger VoIP service.
Switching to video, Gates reported that Windows XP Media Center Edition shipments had grown from 1.5 million to 6.5 million in the year's span between last and this year's keynotes, and he explicitly and repeatedly pointed to the partnership with Intel and its VIIV initiative as a means of further expanding the MCE market.
As an update to last year's keynote showcase of SBC's IPTV service, Gates reported that now-AT&T and competitor Verizon had completed their trials last year, and will begin their production deployments this year. In light of that news, blogger Om Malick just reported that AT&T has launched its IPTV service in San Antonio.
Gates spent quite a bit of time on HD DVD, first showcasing the just-announced $499 Toshiba player that'll be shipping by March. A Microsoft employee delivered a tantalizing HD DVD-on-PC demo, focusing on the medium's enhanced interactivity versus DVD; there's no need to exit the movie in order to access the "extras" and learn more information about a given actor, for example, and a director's commentary track might include not only the audio, but also a pop-up head of the director superimposed over the movie. Gates also explicitly highlighted the medium's support for Managed Copy (the option to legally rip a copy of a movie to a computer's hard drive, for example), and the ability to remotely access HD DVD content stored on a Media Center Edition PC through an Xbox 360.
Speaking of the Xbox, it also received strong focus in Gates' keynote. Peter Moore, Microsoft's corporate vice president, gave an extensive business update. More than 22 million homes now contain Xboxes, and there are more than 2 million Xbox Live members, he stated. My recent article pointed out that Microsoft sold $125 million worth of Halo 2 in its first day. Moore claimed that this was the single greatest day in entertainment retail history.
Turning his attention explicitly to the Xbox 360, Moore pointed out that within the console's first 90 days, Microsoft would launch it in 30 countries, and that the company forecasts it will ship between 4.5 and 5.5 million consoles by the end of June. This may mark a recasting of the company's prior prediction that it would ship 3 million consoles within the first 90 days (by the middle of February). To date, Microsoft and its partners have sold four games per console and three accessories per console (pragmatically, in part a reflection of the initial bundling retail packages), Moore said. Microsoft has added Celestica to its manufacturing partner suite, joining Flextronics and Wistron, in addressing the unmet demand (at least outside Japan), he added.
While 10% of first-generation Xbox users have connected their consoles to the Internet, Moore estimates that more than 50% of Xbox 360 users will link up to Xbox Live. Reflective of that trend, in the last four weeks, there have been more than 4 million Xbox Live Marketplace downloads.
Two weeks ago, while connecting my iRiver H10 portable music player to my Xbox 360 in order to play some Yahoo Music Unlimited subscription tunes, I was reminded again about the single USB 2.0 connector on the back of the unit (joining the two more easily accessible USB 2.0 ports on the console's front, which are intended for controllers, keyboards, and other dynamically connected peripherals). Much speculation had to date been made about if, and if so when, Microsoft might unveil a version of the Xbox 360 with an integrated HD DVD drive. At that moment I was struck by the thought that it might make a whole lot more sense (fiscally and otherwise) for the company to roll out an external USB 2.0-tethered drive. And, in fact, that's what Microsoft is planning to do, according to Moore. The device will come "this year," with a price TBD and explicitly focused on HD DVD movies, not on HD DVD-based games.
Launch titles for the Xbox 360 reportedly fill their dual-layer DVD discs to the brim with content, and I was struck, when I took my Xbox 360 back toIndianaover the Christmas holidays for my nephews to put through its paces, by how frequently and noisily the console accessed the DVD when playing Madden NFL 06. However, game developers' jobs are already complicated by not being able to automatically assume that a user's Xbox 360 has a hard-disk drive. Having to differentiate between DVD- and HD DVD-equipped consoles would make matters worse. I'll have much more to say about blue laser-based optical storage trends after I see what Sir Howard Stringer says, or doesn't say, about the topic in his keynote Thursday morning. Check back for more from Brian's Brain.
