Gates Previews Microsoft's IPTV

LAS VEGAS — Microsoft founder Bill Gates gave a sneak peak at two upcoming products — IPTV for Xbox 360 and the Windows Home Server — during his keynote address on the eve of the opening of International CES, here, while continuing to bang the drum to support the upcoming launch of the Vista operating system.

Like last year's keynote, Gates again stuck only to business topics and used Microsoft execs and not celebrities to introduce the new products.

The heart of the talk focused on making the final connection between the TV and the Internet. Microsoft's effort to make this link is its upcoming Vista operating system, IPTV for Xbox 360 and Windows Home Server software, Gates said.

IPTV for Xbox 360 is an entirely new edition of the gaming system that should ship in time for this year's holiday season, Robbie Bach, Microsoft's president of connected entertainment. He said it will take advantage in the 70 million IPTV service subscribers that Microsoft expects worldwide by 2009. Gates described the device as delivering TV, games, movies, voice and video communications. The new Xbox can bring into the home an unlimited number of channels, contextual advertising, and the ability to combine TV programming and HD and movie viewing.

Microsoft said the 10 millionth Xbox shipped during the recently completed holiday season and that there have been more than 100 million downloads of game content, TV programming and movies for the console.

Gates' other big introduction was Windows Home Server software.

The software will launch this fall in Hewlett-Packard's MediaSmart Server, a product that marks each companies' first attempt to create a home server market. Steve VanRoekel, Microsoft's Windows Server Solutions director, said the proliferation of multi-PC homes and the growing amount of digitally downloaded content has created a need for what has always been a business-class device.

The software was designed so even a novice PC user can integrate the server into their home network, VanRoekel said. In addition to storing downloaded content, the server and software can handle a home network's data backup tasks and Home Server creates a secure, public Web site for the home owner, enabling photos and music to be posted for others, who have been given a password, to access. The site is also a conduit allowing the owner to upload data from a PC anywhere in the world.

HP and Microsoft said quick consumer acceptance of the home server is not expected. Pricing has not been set for the MediaSmart.

Gates outlined Vista, which was first introduced to the world during his keynote address last year. The operating system will launch on Jan. 30 with every major PC maker expected to participate. The operating system was originally slated to hit stores last fall, but only the business version managed to make it out in 2006. During his talk Gates showed several Vista-inspired computers, including HP's TouchSmart PC, Toshiba's Portege R4000 and the Sony Vaio TP1 Living Room PC.

With Gates saying his company does not want to leave the car out of the computer technology loo, Microsoft will move into the automotive space in a deal with Ford that will utilize a new software system called Sync. Sync uses voice recognition technology to allow drivers to call up music, chat on their cell phone or even have cellular IM notes read to them.

Mark Fields, Ford's executive VP, said during the keynote that his company will include Sync in 12 Ford models this year, including entry-level cars.