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Upbeat Future View From Gates, Shapiro, Issa

1/22/2001 02:00:00 AM Eastern

LAS VEGAS -A triumvirate of industry leaders offered an upbeat view of the CE market, tempered by some serious challenges, to a packed crowd at the Las Vegas Hilton Theater for the opening session of International CES 2001.

Gary Shapiro, president/CEO of the Consumer Electronics Association, Darrell Issa, newly elected U.S. Congressman and former chairman of CEA, and Bill Gates, chief software developer and chairman of Microsoft, all hailed the new digital age and the movement of that technology out of the workplace and into the home.

Gates used the session to unveil the Xbox electronic game system, scheduled to ship later this year, and stated that the gaming business-which is the same size as the motion picture business-necessarily expands the movement of digital technology into the home.

Gates presented some details on the Xbox, which will be available "later this year." Called a "broadband gaming device" the deck has four game ports, can support HDTV, and includes an Ethernet connection.

The Microsoft chairman also discussed what he called "The Emerging Digital Lifestyle," paying special attention to the relationship with retailers and with CE manufacturers. A cookbook-oriented approach for retailers will allow a "recipe" for entertainment and information throughout the home. Demonstrations included products from a sprinkling of manufacturers, including RCA's Lyre.

Throughout Gates' talk, he emphasized music and photos, for sharing and transmission, using the PC as the control.

Demonstrating the new Windows Whistler Pro system, Gates touted the primary focus on the PC as the control for all home communication, and emphasized the necessity for wireless, along with the need for eventual speech recognition allowing for portability.

The challenges for developers and marketers are in providing ease of use, fighting "technology schizophrenia" (too many passwords, too much disparate information), and allowing for information handling.

The PC's future is as a digital media center, he said. Control has to follow the user, not the PC. "The concept has to be, you get back into control, not just when you are on your PC." Gates emphasized the new PC as a control for music and picture transmission, and spoke of cooperation with CE manufacturers and with companies such as Intel, whose chip is used in the Xbox.

Windows in the home is moving beyond productivity, he said with PC activity centers emphasizing photos and music, with video, games and communication. Third parties are "surprising us with applications."

Gates emphasized the "real explosion" of the PC had been in the workplace with text." But now, recalling milestones, he said there was a return to the original dream that this is a device for all.

The ways we use music and photos are "changing permanently." As one would expect from Microsoft, Gates stressed that "software is the key that defines communication," and in order to support that communication, the household will have to move "up to broadband."

With no specifics, all of the speakers alluded to the future of music and visuals as the future of the PC, and by implication, the future of the CE business.

All of the participants indicated confidence in the market. Shapiro, while recognizing that the retail market has been tough, said CEA is responding with attention to sales training and product return issues. Other challenges include protecting home recording rights along with intellectual property.

"Our mission is to grow the CE industry," he said. "The digital age is in full swing." Priorities include the future of broadband and public policy initiatives for access by all.

In Congressman Issa's welcoming remarks he said, "I hope to be a lobbyist in Congress for our technology.We are going to have to think globally." Issa mentioned the need to focus on global issues and the protection of intellectual property.

The new Congressman was presented with a Founders Award by Gary Shapiro, recognizing Issa's contributions to CEA while he was head of CE manufacturer Directed Electronics.