CES: Gates expands Microsoft's digital home plan

Microsoft Corp.'s Chairman Bill Gates is kicking off the International Consumer Electronics Show (CES) Sunday by unveiling products Microsoft hopes will encourage more widespread adoption of the digital or "connected" home.

Microsoft has been promoting the idea of a connected home, where multiple devices can access and share multimedia content stored on a PC or a central server hub, for some time, but so far only the most savvy or wealthy technology enthusiasts have realized even a piece of that vision. But Gates and Robbie Bach, the president of Microsoft's Entertainment and Devices Division, who also is scheduled to appear Sunday, aim to show how Microsoft can help more people can get access to the technology.

Gates is announcing that service providers such as AT&T Corp. that offer IPTV (Internet Protocol Television) using Microsoft's software will begin offering this year the Xbox 360 console in lieu of a set-top box. Service providers still will give users the option of the typical set-top box for IPTV or an Xbox 360, said Microsoft spokesman Eric Hollreiser.

Still, the announcement sets up a scenario where a home user can watch television and surf the Internet through their Xbox 360 console, which also is an IP-connected device. The move shows Microsoft upping the ante to provide not just software, but also hardware for the digital home, which could eventually put it in competition with its own hardware partners.

As expected, Windows Vista, which will have its widespread consumer release on Jan. 30, is also a major focus of Gates' speech. He is expected to unveil new deals that will deliver more media content through Vista's Media Center capabilities. Windows Media Center, which used to be its own OS but is now part of Vista, allows users to serve up content stored on their PC on televisions, or use their PC or another device to set content for their TVs.

Deals with NASCAR, Fox Sports, Nickelodeon, Showtime and Bongo will deliver specialized content through Windows Media Center. All of the content except Bongo's will be free; users will have to pay a subscription for Bongo content.

Microsoft also will allow users to submit video content they have created to Media center by integrating it with Soapbox, Microsoft's YouTube-like user-generated video upload service.

The debut of Windows Home Server, a product Microsoft has mentioned before under the code-name "Quattro," is also aimed at helping consumers establish a more connected home. Windows Home Server will not be sold directly to consumers, but will be used by OEMs such as Hewlett-Packard Co. as the basis for new hardware that consumers can put in their homes to connect their Windows Vista computers, Hollreiser said.

Users with a broadband connection and more than one computer or device that has an Internet connection can access data stored on Windows Home Server. It also will provide data security and automatically back up data every night.

Windows Home Server is aimed at providing a centralized server hub for multimedia files in the digital home, Hollreiser said. It will come in both Windows Vista and Windows XP versions, and pricing and specifications will vary according to the manufacturer. The first hardware using Windows Home Server software should be available sometime this year.

Gates is also showing off some new hardware from Microsoft partners that use new Vista features. HP's TouchSmart PC, for instance, will take advantage of touchscreen capabilities in Vista, while the Toshiba Portege R400 laptop will include a display screen on the top of the laptop that uses Vista's Sideshow technology to show users content such as their Outlook schedule without having to open or turn on their PC. Gates also will show off a new ultramobile PC from Medion, as well as a new Vaio by Sony Corp. optimized for Media Center.