Gates' speech was more of a rallying cry than technical briefing to an audience made up mostly of engineers working on next generation hardware products, gathered in Seattle for four days of technical seminars.
Microsoft has a great deal invested in this trio of new products, which will hit the market between the end of this year and early 2007. But to succeed, it needs the support of a wide group of companies that are part of what Gates refers to as the "Windows ecosystem."
Gates started his talk by reminding the audience how the PC is changing with better support for telephony (voice over Internet), bigger and better screens, built-in wireless connectivity and drives that can read and write both standard CDs and DVDs and (soon) high-definition DVDs.
He pointed out that instead of replacing the PC, the plethora of new mobile digital devices — such as digital cameras, camcorders and Smart Phones — actually enhance the role of the PC. That's because it is becoming the core of the digital home – the place where you store and load all that data.
Gates even tied in the PC to globalization. "As the world globalizes, the tool that allows that to happen is the software ecosystem running on the PC." Gates said that more than 250 million PCs will be shipped this year, 10% higher than the previous year.
As he has for the past several years, Gates touted the "tablet" PC, which is a combination of writing pad and laptop PC. Microsoft hopes to make this a mainstream product with widespread adoption by students and office workers. But Gates admitted that it's mostly being adopted in vertical markets such as health care and insurance, where a tablet PC with a stylus makes a great deal of sense.
The Microsoft chairman showed off a number of portable products from the company's hardware partners including a $99.99 "dual mode" Uniden home phone (Win 1200) that can make calls via the Internet or via a standard landline.
The phone works with an upcoming version of the Windows Live Messenger service to make PC to PC calls and can also be used to make PC to landline calls for a small fee or as a regular landline when connected to standard phone service.
Gates predicted that over time PBXs ("private branch exchange" — the hardware system that many companies use as their electronic telephone switchboards) will be like mainframes in the sense that there will be less and less of them. He predicts that Internet protocol-based phone calls with PC software in control will eventually take the place of "the specialized limited capability that a PBX would support."