Microsoft Chairman and Chief Software Architect Bill Gates opened the 2003 International Consumer Electronics Show (CES) last night with a keynote address titled "Smart Living in the Digital Decade." The talk highlighted the company's successes in digital media, video gaming, and home networking while pointing to future technologies that the company will release later this year and in the future. Gates did his usual deadpan humor bits and presented a few humorous video clips, one of which spoofed VH1's "Behind the Music" series. Industry celebrities such as Marc Andreessen and John Sculley appeared in that clip, as did actor Anthony Michael Hall, who portrayed Gates in a made-for-TV movie called "Pirates of Silicon Valley." Gates quipped that one of his New Year's resolutions was to ask USA Networks to make a sequel.

"Smart living in the digital decade is possible because of advances in three key areas coming together: devices, connectivity, and services," Gates said. "Advances in each category drive the other categories. A lot of the big predictions we made about the digital decade are now taking place, thanks to pervasive broadband, wireless networking in the home, and devices with advanced smart screens, disks, and memory."

Gates then took attendees through the company's recent product successes with the Tablet PC and the Media Center PC, both of which require special Windows XP versions. "We sold 90 million copies of XP in 2002," Gates said. "It was the strongest year ever for any version of Windows." Gates also talked up Windows Media 9 Series, Windows Movie Maker 2, and Plus! Digital Media Edition, which the company released earlier this week. The first Windows Powered Smart Displays hit retail stores the same day, he said.

Looking toward 2003, Gates discussed some of the smart devices we can expect in the coming days, including new Pocket PC devices and Windows Powered Smartphones; various Smart Displays; new Media Center PCs, including laptop products from Alienware and Toshiba; and some interesting noncomputer-type devices, such as an exercise machine and sewing machine that feature Windows CE .NET, flat screens, and Internet connectivity. An especially interesting device--Media2Go--is a Microsoft prototype that various hardware partners will sell in late 2003. Essentially a portable media player with a 4" LCD screen, Media2Go also includes a 20GB hard disk, which Microsoft says is large enough for 175 hours of digital video, 8000 songs, or 35,000 photos. I'll provide more details about this intriguing product after a Friday briefing.

After Gates played against Los Angeles Lakers star Shaquille O'Neal on Xbox Live, Gates hinted at an upcoming revision to Microsoft's broadband networking products that will feature "better speeds and new security and quality of service capabilities that will enable voice and multimedia services over wireless." He also talked up other wireless technologies such as Bluetooth and 3G.

Bringing all these advances together, Gates said, is a technology initiative called Smart Personal Object Technology (SPOT), which he first discussed during his COMDEX 2002 keynote address 2 months ago. SPOT will bring all the technologies Gates discussed together into new, small form factors and reenvision common household items as interconnected smart devices. And although the company has many plans, including smart alarm clocks, refrigerators, and other devices, the first deliverable product will be a smart wristwatch platform that major watch makers such as Citizen and Fossil will support. I'll write a separate article about the SPOT wristwatch and related technologies such as smart magnets. These products feature small LCD screens, SPOT silicon, and interconnectivity with services for weather, news, sports, and related information through the new Microsoft Direct Band networking scheme, which uses the FM band to send data. These products will be available in late 2003.