Microsoft Chairman Gates Says Digital World Taking Hold

LAS VEGAS -(Dow Jones)- Microsoft Chairman Bill Gates unveiled an array of new products and services Wednesday night as he claimed the age of digital entertainment is taking hold among consumers around the world.

The time is right to enhance the music, movie, photography and other digital services people now expect when they take their computers, cell phones and handheld devices online, Gates said during a major address in Las Vegas at the Consumer Electronics Show.

During a speech kicking off the event, Gates demonstrated key new Microsoft products, including its Windows Vista personal-computer operating system, its Xbox 360 game console and its Windows Mobile operating software for cell phones and handheld devices. The address was the industry luminary's 10th appearance at the annual trade show, which is expected to draw 130,000 people and 2,500 companies over four days.

He said the industry's goal should be to make the online experience more vivid and real.

Gates said Microsoft remains on course to ship between 4.5 million and 5.5 million Xbox 360 game machines by June 2006. The console has been plagued by supply constraints since it was released in November. During his address, Gates said another assembler - Celestica - would join Flextronics International and Wistron of Taiwan in building the product.

He also said the console has spurred game sales. Four games have been sold on average for each console, compared with 2.4 games per console for the original Xbox.

Gates went on to say that Windows Vista Media Center personal computers, from manufacturers such as Dell Inc., Hewlett-Packard and Gateway would be ready for the 2006 holiday season. Media Center PCs have extra features to simplify their use of digital music, photos and video. During December, 47% of desktop PCs sold in the U.S. were Media Center computers running pre-Vista versions of the operating system.

The new Vista Media Centers will allow consumers to play television programming on a TV set without the set-top boxes that cable companies generally distribute with their services.

Gates also said the Palm Treo 700w - the first Treo to use the Windows Mobile operating system - will go on sale Jan. 5. Its expected price will be $399 with a two-year service agreement from Verizon Communications Inc.

Also reaching the market in 2006 will be wireless phones from Philips Electronics and Uniden Corp. of Japan designed to make Internet phone calls using Microsoft's MSN Messenger software.

The Voice 433 Dual Phone from Philips will ship in Europe and Asia in 2006, and the Win 1200 Digital Cordless Phone from Uniden will ship in North America in the spring and sell for $99.99.

Gates said as well that MTV Networks would begin offering songs and music videos on Microsoft's MSN Network. In addition, Windows Live, a series of Internet-based services Microsoft rolled out in November, will begin allowing users to go online to arrange for their Media Center PCs to record television shows.

-By Mark Boslet, Dow Jones Newswires; 650-496-1366; mark.boslet@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 5th January 2006