Announcer: Ladies and gentlemen, please welcome the host of NBC's Late Night, Conan O'Brien.
Conan: Thank you. Thank you very much. Clearly, Microsoft couldn't afford to send my band out, sorry about that. Lean times at that company. Welcome to the show. I don't have my glasses, but welcome to the NAACP event this evening. I have to admit you're a whiter crowd than I was expecting. Let's quickly have a hand for CES Chairman Gary Shapiro right now. I think he did a pretty incredible job. That was amazing. He whipped this crowd into a frenzy. That hunt on the shuttle bus just had me in stitches. I like what he's wearing this year, too. Apparently he goes to a magician now.
Let me begin tonight by giving you all the good news. All right. When Bill Gates walks onto this stage in a few minutes, the average net worth of each person in this room will be $128 million, congratulations, enjoy. If you're going to hit on somebody, do it now.
The theme this year is that gadgets are no longer just for geeks. If you look around you, they're also for nerds and dweebs. (Laughter.)
I was checking out before the show, this is not exactly this convention, not exactly a magnet for the ladies. I think I saw more women at Elton John's bachelor party, to be honest.
Honestly, though, the technology unveiled at this convention every year has truly changed our lives. Think about it, in the past personal computing and software was just for techies. Now, thanks to the digital revolution, housewives, grandmothers and teenagers can all download 24/7. Thank you. The exhibits at CES this year are pretty cool. Have you seen any yet? Starts tomorrow morning. I just went to a display on voice recognition. I said, "Hello computer." And it said, "Hello, little girl."
Well, the future gets better. I was just given a tour of the Microsoft Smart House. They showed me the famous Microsoft Smart House, which is really amazing. I certainly can go home and tell my house, you're an idiot. My house has low self-esteem. Of course, it's great to be here in Las Vegas. Good news, Barry Manilow just signed a multimillion-dollar deal to sing exclusively for this hotel. That's right. So, now you can come to Vegas to shoot craps or just listen to it. (Laughter.)
I'm leaving tonight. I'm not sticking around this town. Tonight isn't just about Las Vegas, though, or even just CES, it's about Bill Gates. That's right, the man of the hour, Bill Gates. I won't be saying anything negative about Bill this evening, not because I don't want to, but because he implanted a Pentium chip in my cortex. One blast backstage, I'll void my bowels, it's over.
You know, I got to know Bill a little bit, and he's a very good family man, a very good family man, he has a wife and three children. So, don't let the term "Microsoft" fool you. It's a sinker and not a good one. It was fun watching it was fun watching Bill walk through the casino this morning, all the electronic gambling machines started chanting, "All hail, the chosen one."
Now, there are those of you who think that when it comes to hip consumer products, Microsoft just doesn't get it. Well, tell that to Microsoft's new 42-pound Internet-ready calculator watch. Did you see that thing in the Hilton lobby? That's actual size. I know that some people think of Microsoft as the evil empire. Well, I want you to know that Bill Gates has spent a lot of his own time and money to rid the world of these people.
But tonight isn't about any one man, it's about a world of incredible new products announced here for the first time at CES. And I have a pretty exciting announcement of my own. High-tech gadgets have become such a cultural phenomenon that NBC has produced a made-for-TV movie about CES. That's right, it's going to get our network out of the toilet. They just finished casting it those are jokes I can't do in New York they just finished casting it, and I have the exclusive, never-before-seen list of who is playing who in this incredible movie about CES.
For example, Microsoft CEO Steve Ballmer is going to be played by Terry Bradshaw. The founder and CEO of Real Networks, Rob Glaser, will be played by Seinfeld's Neuman. This is excellent casting. Apple Computer CEO Steve Jobs will be played by Ringo Starr, when you watch the movie just forgive the accent. Sun Microsystems Chairman Scott McNealy will be played by a Ken doll. Amazon CEO and founder Jeff Bezos will be played by an emu. Let's sit on this one for a bit, it's worth looking at. I can't tell which is which. Microsoft co-founder Paul Allen will be played by Janet Reno. I will never be asked back. Dell Computer's Michael Dell will be played by 12-year-old Fred Savage. This is a hard one to pull off, the Google guys will be played by Turner and Hooch. And finally, the man of the hour, Bill Gates will be played by Milhouse from the Simpsons. (Laughter and applause.)
Isn't this thing pretty, they've completely recreated my set. They did it in two days, and it's much better than the piece of crap I have back at NBC.
All right. It's time now, ladies and gentlemen, to introduce the man of the hour. He's the sultan of software, the duchy of DOS, the archbishop of binary, the potentate of PowerPoint, the maharaja of Microsoft, the Nebuchadnezzar of the Net. Ladies and gentlemen, Bill Gates. (Applause.)
Welcome, Bill. I understand it's a huge thrill for you to meet me. Welcome to the show you pretty much paid for. This is a last minute booking, too, that's the incredible thing. I know I'm going to get to you over the hour. I'll win you over slowly, and then you'll have me destroyed.
Of course, there's a lot of people here. Let's be honest now. Only half this crowd is here to see me, the rest are here to listen to you talk about CES and tell them [about] digital lifestyle, what can we expect. Let's start slowly, and I'll take me through this, because I'm a moron. I'm not kidding, I am a functional moron. (Laughter.) They know.
Tell us, what are you interested in, what excites you right now about the digital lifestyle.
Gates: We predicted at the beginning of the decade that this would be the decade that the digital approach would be taken for granted, whether it's photos, music, communicating. There was a lot of work to do, getting the software breakthroughs, the hardware breakthroughs, the ease of use, the security, all those tough problems. What's fun about this show is it lets us come and see what the progress is, see all the inventive things that the various companies are doing, see how they fit together. And I think this is pretty phenomenal. This has been a great year moving towards the digital lifestyle. I'd say it's going even faster than we would have expected.
Conan: So it's boggling even in your mind, the great Bill Gates is completely boggled by what's happening.
Gates: I'm excited about it.
Conan: I like the term boggled. It's funny. What does this mean for the PC? Microsoft, of course, that's the big gun, the PC. What does it mean for the PC, because that's all I know when it comes to software is my personal computer, what are we going to see here?
Gates: The PC has a central role to play, in that it's where it all comes together, e-mail, instant messaging, if you want to organize your memories in a rich way, if you want to edit photos, if you want to create papers. But, it won't be the only device. All these other devices, whether it's the phone, the set top, hardware in the car, every one of these things is going to connect up. And so it's the way they work together that really makes a difference.
We're probably developing software for a wider range of hardware than any company, from the SPOT watch all the way up to the high-end server. And we need a lot of standards, standards for how the media works, the rights management works, to keep this all very simple, because no scenario can be delivered unless all the devices are coming together. So as we go we're getting a lot of feedback about what people like, how we can make this better, and the vision is there. We're putting in $6 billion a year of research and development.
Conan: To which tonight I'm going to announce, I'm adding my own billion, $7 billion will be put into this research. I just want to do it. I think it's important. You clearly don't think I have that kind of money. And you're not wrong. What about the perception that I mentioned in the monologue, it was hard to hear because of the laughs, there is a perception out there sometimes with Microsoft that Microsoft doesn't get it when it comes to the consumer. Do you think that's fair?
Gates: We've recently had our fair share of successes, and our fair share of things we had to do a version 2 and a version 3 of. If you look at Windows, Windows PCs, the sales have been very good. The share is very, very strong. We've had some huge hits recently, Halo 2 now 6.3 million people.
Conan: Right, that's actually a phenomenon, Halo 2.
Gates: It's quite a phenomenon. That's more than even the original version, and people are online playing with each other. And I think it really points to the future.
Conan: That could be misinterpreted, leave that alone. Trust me, this is a dirty crowd, and I'm angry with them. It's amazing, people are gaming with each other who will never meet, and it's opened up a whole new world of possibilities.
Gates: That's right. Gaming is becoming more of a social thing, and all the different genres, including some that will draw in older people, draw in really everyone [who] will use this rich communication. So if you look at what's going on with e-mail, instant messaging, blogging communities, and now this live entertainment, if we can integrate all that and make it seamless so you can see a person's presence across that, invite them to do different things, then we will have created something that's quite phenomenal.
So consumers have high expectations. They want devices that are simple, low-priced, do all these things. They don't want to have to worry about privacy and security. So that's why the large R&D budget is what we think we need to do to really deliver the whole vision and get everybody involved by the end of the decade.
Conan: All right. Now, a lot of people here have come, they want to hear specific ideas, so Microsoft's strategy for consumers is? Do you want to break it down for us, what specifically we're talking about here?
Gates: I think the easiest way to look at it is to take the scenarios and say, how will people be doing things in a different way, work at things like meetings, or analysis, budgeting. At home we think about music, that's a big scenario for us, we think about photos and everything you want to collect and organize for your memories, we think about TV, consuming media anywhere you want, being able to create in that realm.
We think about communication and we think about gaming. And every one of those, the digital approach across these different devices, we think we can deliver something that's very, very compelling, a lot more flexibility, a lot more simplicity. If you look at today's living room you've got about five remote controls, and you still can't get your music when you want, or the videos, or get content in a rich way.
Conan: It's insanely frustrating. I have a holster of 45 remotes that I have to go for, and it usually ends in a small fire. So I think people are looking for this kind of integration.
Gates: Right, a single remote control, very simple interface, customized to the things that you're interested in, and letting you move that information to all the different devices. That's why this show is so important, because you can see where that progress is. You can see the high-def screens that are coming down in price, selling in very good numbers. You can see the new phones, the PCs, and the fact that for each one of the scenarios I mentioned it works better.
Conan: OK. Let's start maybe with music, and just tell us what you see for music specifically.
Gates: Music is a fun area. It's one that everyone I think would agree it's going digital, so the ability to create playlists, to have it in your pocket, to organize it in rich ways, people are going to take it for granted. In many of the scenarios that we're going after, things like the portable Media Center for video, Tablet computing, we're out in front and pioneering. In the case of a few, like music and search, people of look at us and say, OK, other companies started out here, can you not only match but do things that are better, do things that are different?
What we're doing here is taking an approach, it's very typical for us, we're saying, we're not going to make the hardware, we're simply going to provide a rights management system that can connect up everyone who is using Windows Plays For Sure, those devices, to everybody who has got content. And this Christmas we had people like Creative, with the Zen Micro, we had the Real Carbon, those devices sold very well, in fact, were sold out. We've got a new portable music device that uses the Windows technology. This is the I-River H10. This will be about a $279 device, it's got a color screen for photos, it's got FM tuning, very simple little user interface, a very nice device there.
Conan: I'm not getting a lot up front, so I'm going to find what I can.
Gates: It's a good example, if you unleash any company to partner into this ecosystem, you're going to see a lot of neat new things. So we've got 50 different devices that play out there, and those are going to drive this digital music forward.
Conan: A cynic might say, haven't we sort of seen everything in music? Have we seen pretty much the extent to what we can do in music, or do you think there's more to be done?
Gates: Certainly most people are still not in the digital realm, if you look at online music sales, it's pretty small. There's a view that enabling subscriptions will help that a lot, you pay a monthly fee and have access to literally thousands and thousands of tunes. We've enabled that for the first time, the technology, and the Windows Plays For Sure allows you to have a monthly subscription. Many of our partners are coming out with those offerings, and we'll see if that catches on in a very big way.
I think we're just at the beginning. It's like saying, where were we in personal computing in the 1980s? Well, we had shown that the possibility was there, we were getting more and more exposure, but we weren't ready for everyone to do it. Over the next five years that's going to happen with music.
Conan: I just want to point out, this is something we don't do on our show, but as you mention things they appear behind you magically. And I'm thinking that would be great to start using in late-night talk shows, when celebrities are giving their lame stories, if they were illustrated behind them, wouldn't that be a huge innovation. See, you've got me thinking now of ways to improve the bad stories Ben Affleck tells on television late at night. These make them better. There are constant improvements to be made.
Gates: Well, we can help you with that.
Conan: Thank you, please help me. I can't believe I just got you to agree to help me with my show. Thank you.
What about scenarios in photography, photos, that's actually something that I do use. I have a 15-month-old daughter, and since she was born I became the cliche, constantly taking digital photographs. And that, more than anything else in the digital world, has affected more personally.
Gates: It is phenomenal, the quality of these digital cameras, and this is another example where having lots of choices is driving things forward. You've got the high-end professional cameras that are now even better than what film can deliver. You have the consumer cameras that are getting small, putting in the color screens and even now blurring the boundary between what is a still camera, what is a motion camera, what is a phone. There are a lot of different offerings there.
We want to make it so that you can acquire those photos, and get them onto the PC in the easiest possible way. So we've created standards that are going to help with that. That's very explosive. In fact, the camera that you and I are working with is one of the first cameras to have this built-in ability, without any commands at all, send the photos onto the PC.
Conan: Yeah, it's pretty amazing. You guys gave me this camera to mess around with, and you and I actually explored it last night, we played around with it a little bit.
Gates: Yeah, we got some photos in there and you can take more photos.
Conan: Take some more photos right now.
Gates: Yeah, it's got a wireless connection in there and so what we're going to see as after you turn this on --
Conan: Right, it's turned on now. I can take some photos of you right now.
Gates: -- those photos are going to move down onto the PC.
Conan: All right, come on, baby, give it me. All right, that's nice, that's right, baby. (Laughter.) Come on, let's work it, Bill. Oh yeah, baby, come on, mama. All right, all right.
Gates: All right, OK, that's funny. (Laughter, applause.)
Conan: Dah! (Laughter.)
Gates: Here on the screen this is Media Center, which is our key product that has really converged everything, and here is this single remote control that lets you navigate. Well, we're in the photo section here.
Conan: These are the photos we took I think last night.
Gates: That's right. So if I click OK I'll get a little slideshow and you'll get a little glimpse of what we were up to together here.
Conan: OK, all right, OK, and right now nine people are being fired. (Laughter.) Digitally fired, wireless, there's no connection. (Laughter.) That's the beauty of it -- you don't need firewall or -- I don't know what I'm talking about.
Gates: OK.
Conan: I'm a monkey. All right, we'll get this going. Should we start, should I just -- are we ready to go? OK, the first photo here is you picking me up at the airport right there. I thought that was -- are we seeing these at all?
Gates: No, I don't think we are.
Conan: No, I don't think we are.
Gates: That's the problem when you have the wrong remote control. It's a good thing you only have one, though.
Conan: Yeah, that's good. (Laughter.) All right, well, is anybody going to do anything or should we just move on? (Laughter.) Did I mention there was gambling in this town, Las Vegas? Feel free to hit the tables. You can come back when we get this thing working.
Gates: How did you like that camera?
Conan: This camera? You know, I've got to say I have very weak childlike arms, I'm not strong, I'm flaccid, limp, so I didn't like it, it's rather heavy. I had a hard time lifting it and I was weeping within half an hour; it's a little heavy. (Laughter.)
Gates: Yeah, that's a very high-end camera, incredible resolution, and that's the Nikon D2X. Nikon will be putting this ability to send the photos down automatically, building that into every one of their cameras, so this is more of a consumer item, pretty impressive but maybe a little better --
Conan: So you're not going to get the same resolution here obviously but it's a much lighter, easier to use camera?
Gates: Right.
Conan: Yeah, all right.
Gates: Think you can handle that one?
Conan: Wow. Don't mess with me, man. You have no idea the rage that's in here. (Laughter.)
Shall we move on? Let's move on to an area that I've clearly mastered, I'm talking about television. Oh, I couldn't get a laugh. (Laughter.) No, television I think it's obviously very important to me, it's my future, it's my livelihood; what's going to happen in television, what will we see?
Gates: Well, again here it's about choice, letting people see more variety of shows, letting them see these shows when they want to, being able to mix content they might go and get over the Internet in with things they're getting over their normal video sources.
And our centerpiece for this is the Media Center. This is a product we brought out a couple years ago. This is a big year for us, we got up to 1.4 million units.
Conan: I'm going to interrupt you for one second because I think they have the slideshow together. Do you want to take a look at that right now?
Gates: Let's give that one more try.
Conan: Let's give it a shot and let's see what we get here and again, just incredible, I don't know who's running things here. (Laughter.) Who's in charge of Microsoft? Oh. (Laughter, applause.) Whew.
Well, I think they say we're ready to do the slideshow, that thing keeps blinking, but I think not, so maybe we'll move on yet again.
Gates: Yep. (Laughter.)
Conan: I love that.
Gates: All I have to do is click one button. It's not real complicated.
Conan: Yeah, yeah, yeah, exactly. That was a powerful yep. (Laughter.) The yep heard round the industry. (Laughter.) Oh my God, Bill said "yep," get out of here. (Laughter.)
You were talking about television when I was so rudely commanded to interrupt you.
Gates: OK, so Media Center, we doubled the sales this year and we've got that simple interface where you can just navigate through, use the control. What is key for us is to build up the ecosystem, better hardware and the partners there did a great job, brought the price points down, brought the quality up. And we also have new content partners, and that's probably the biggest thing of all. We've got Discovery who is doing unique content that fits on Media Center, Yahoo, we've got Fox Sports and lots of new devices, little remote controls that actually show you the different things that are playing, let you choose things even if you're in a room without the TV set, so we're very excited about the progress with Media Center.
Now, there are a lot of different ways that we're letting people get better TV. Media Center would be the high-end and the most flexible. We're doing set-top box software, we're doing a device called MSN TV that plugs into your TV, lets you browse the Internet, sort of simpler than a PC and very straightforward for a lot of people. We've got standards that make all these things work together. That's where the Windows Media connect is. And our software will be used in some of the DVD recorders that come out, and that means you'll get that better connectivity.
In fact, probably the easiest way to understand what we're doing with Media Center is to get one of the product managers, Sean Alexander, to come out and just give us a look at some of the latest things around Media Center. So let's welcome Sean.
Conan: Sean Alexander, everybody. (Applause.)
Alexander: Thanks, Bill.
I'm excited to be here today to show you how with Microsoft technology and partnerships in the television industry we're dramatically enhancing the entertainment experiences for consumers and providing a wider range of choice in terms of the ways that you can experience that digital entertainment starting today.
So right here I have an Alienware Media Center Edition PC and what I'd like to do is go ahead and bring this up and show you a little bit about how I use a Media Center in my own home and perhaps you might use it yourself. In my house we have a 18-month old son, and with that we like to watch a lot of movies but we don't necessarily have a lot of time to watch the movies all the way through. But we do like to be able to take pictures of family members and friends and things like that and, of course, our son, but what I thought we'd do is go ahead and throw it back to Conan and talk a little bit through the photos that we have here on the Media Center system and we'll pick back up.
Conan: Great, don't want to put too much pressure on this comedy bit. (Laughter.)
Oh, see, there's Bill and I, he met me at the airport, we hung out by the pool. Then Bill used Microsoft technology to beef up his picture. (Laughter.) A little unfair. Then Bill and I hit the bar, had a good time. And then we got so drunk that we actually went out and we got ourselves matching tattoos, which is always good. (Laughter.) And, in fact, I got so drunk that I woke up with a hooker, Bill got so drunk he woke up with an Apple computer. (Laughter, applause.)
Alexander: So that's just a small example of what you can do with a Media Center PC. (Laughter.)
Conan: Thanks a lot, Sean.
Alexander: No problem, Conan.
One of the features that I love is the music feature in Media Center, which makes it very easy for me to access all of my music, all of my albums visually and control it very easily with a remote control.
But the feature that my wife likes best, being a TV buff, and I like to watch movies, with our 18-month old son we don't have a lot of time to watch movies or television uninterrupted. So with the personal video recording features built into Media Center it's really easy for us to go ahead and pause the TV program, maybe answer the door and then come back to it, because the Media Center PC is not just a Media Center PC, but it's also a hub for whole home entertainment.
So I can go ahead and pick up my TV program where I left off here on my Media Center, or I can actually pick it up on any TV in my home using a product called Media Center Extender. It's available in two versions, both a set-top box as well as a kit for Xbox, so you can go ahead and experience full personal video recording as well as the complete Media Center experience on any TV in the home. And, in fact, it's a great way to convince your wife that you need a second Xbox in the house.
So a couple features that we like here, the first one, of course, is the guide. Because this is a full-fledged PC, it's high performance and I'm able to go through it very quickly. I can go ahead and select and record any one of these TV programs, but a unique feature to Media Center, not available in any other personal video recording product, is the Movie Finder service. The Movie Finder service takes the best of the video rental experience and brings it to the existing lineup of channels that you already subscribe to today. So, for example, I can visually browse all the movies that are available on my lineup today and if I want to record any one of these movies, let's say Austin Powers, for example, one of Bill's favorites, I can go ahead and just hit the record button and it will automatically record this and store it on my Media Center PC to play back here, as well as on any other Media Center Extender on my home network.
So that's just a small example of what Media Center is capable of doing but it's also a platform. Because it's based on Windows, entertainment providers can build a wide range of different services on top of Media Center and enable a wide range of experiences for consumers.
So we're very excited today to be able to announce that we have new partners that we're launching today including the Discovery Channel, which are providing in the online spotlight guide in Media Center starting today new services directly within Media Center.
So let's go ahead and take a look at an example of one of those with Discovery Channel.
So Discovery Channel saw an interesting opportunity with Media Center to provide a rich media guide for the subscribers, which provides a much more immersive experience than what you have available on your traditional TV today.
So what I can do here is you'll notice that it automatically tunes in to the Discovery Channel live here, and I can go ahead and browse through what's on today, maybe pick up a series. In fact, one of the series that I've become a big fan of is "American Chopper." And the interesting thing about that is I don't even ride a bike.
So a couple things that you'll notice here, I have the ability to go ahead and preview, I can go ahead and watch the TV show live. I also have extras available here as well. And again accessing the Discovery network I can go ahead and watch a preview and then if I'm happy with this I can go ahead and set the Media Center to automatically record it. Now, that's an exciting experience that any content provider can go ahead and enable, again just using the platform that is Media Center Edition 2005.
So we're very excited to announce that we have some of the largest names in digital entertainment offering services now in Media Center, making it even more mainstream and convenient using just a simple remote control.
Speaking of remote controls, we have three partners that we're very excited to announce are taking the experience with Media Center even more mainstream with our universal remote controls. Logitech, Niveus Media and Philips have all announced support for Media Center remote controls as a universal remote such as the one that I'm using here today from Philips.
One of the things that you'll notice about this remote is it has the signature green button that's unique to Media Center PCs. So while you can use it with another system, you're going to get the best experience possible when used with a Media Center PC.
So that's just a small example of how we're extending that experience, but what about the quality? As I'm putting a Media Center PC in my living room, I want to know I'm going to have the best possible audio and video experience.
So today we're very excited to announce that Microsoft is working with the Imaging Science Foundation or ISF to deliver a certification program for new Media Center PCs. We have a broad range of OEM as well as hardware manufacturers that are taking the same certification program that's used by companies such as Ricavision and Pioneer's Elite line for their high-end home theater systems, and now applying this to the PC platform with the Media Center system. So this is a very exciting announcement, we're going to have a number of new PC manufacturers as well as video card manufacturers releasing products for this later this year.
So that's Media Center, that provides me with a great experience in the living room, but what about when I'm on the road? For example, I realized this morning that being a big fan of the TV show "Alias," in about an hour and a half the two-hour season opener is going to start. So I realize I forgot to set my Media Center to go ahead and record that. So thanks to a new service that we're launching this quarter with MSN called MSN Remote Record, any consumer who owns a Media Center Edition 2005 PC will be able to go ahead and remotely set up their Media Center to go ahead and record their TV programs whether they're on their laptop, in their hotel room, whether or not they're on their cell phone or on the go.
So what I thought we'd do here is give you just a quick example of how that works. So here's my Tablet PC. So again just using Internet Explorer and using my Passport account, I can go ahead and access the same programming guide that's available on MSN Entertainment today, but thanks to some software from Microsoft I can go ahead and click on the program in the program guide and select either record it once or record it scheduled.
Now, unfortunately I have a little challenge with the Internet access here so we'll go ahead and take a look at that later.
So that's the Media Center experience that we have today with Media Center Edition 2005, we have MSN Remote Record coming later this quarter, but we know that consumers want broader choices in terms of the way that they experience their television. Maybe they want to go ahead and add a Media Center experience or add an additional home theater experience to their existing system.
So we're very excited to give you a sneak preview today of a couple of new exciting partnerships that we have in the industry that are going to bring breakthrough new products to market starting later this year.
The first one that I'd like to show you is in partnership with LG [Electronics}. Microsoft and LG have developed a new digital DVD recorder that enables you to go ahead and burn DVDs that you can go ahead and play back on most consumer DVD players. So let's go ahead and take a look at this.
Well, one of the nice things that we've done here is with Microsoft software, a TV tuner and a hard drive we've enabled the full personal video recording capabilities right inside this device as well.
So what I can do here is I could go ahead and watch maybe "Late Night" with Conan here, but we also wanted to take that same familiarity of the Media Center experience and extend it to a whole new class of device.
So one of the primary barriers for DVD recorders today is they're too difficult to use. So with this we're taking that same familiar experience and making it much easier for consumers to do. So here, for example, I get the same familiar guide right here inside of the device, I can go back to the main menu and if I want to go ahead and burn a DVD I just choose Create DVD, choose the programs I want to record, maybe "The Adventures of Jimmy Neutron" for my son, and let's go ahead and get him started on "Late Night" early. And I'll go ahead and just click one button, and I'm ready to go ahead and burn that to disk and enjoy it anytime I want.
But we wanted to take that experience even further. You'll notice in the menu you also have the support for My Pictures and My Music. I have the ability to go ahead and connect to any Media Center PC or any Windows XP PC on the home network and stream pictures and music, home videos directly onto this device and enjoy it in the comfort of my living room or in another room with the TV.
In fact, we've even taken that further with the ability to go ahead and synch recorded TV programs that you recorded on this device back onto your Windows XP PC, and then synch them onto devices such as Portable Media Centers or Smart Phones. So it's truly an integrated experience, which provides the familiarity of Media Center with the comfort of a device that fits a whole new category of consumers' lifestyles.
So that's great for DVD burners and DVD recorders, but what about consumers that are interested in buying high-definition TVs this season? As you look at what the CEA has announced earlier this year, they said they expect the HDTV market to absolutely explode this year. But we wanted to take that experience even further with a couple of partners and provide a truly connected experience that not only has an HDTV with tuners built in, but you also have the ability to connect up again to your home network and enjoy a broad range of digital entertainment.
So we're excited to announce that Pioneer and Digitrex are both showcasing next generation HDTVs here at CES this year, which provide Windows Media Connect technology, which enables you to go ahead and access your Windows XP PC and play back music and pictures, all of your digital entertainment around the home network directly on this TV.
Now, one of the really nice things about this is that the device here from Digitrex, which is a 40-inch LCD, will also be certified for PlaysForSure services, so any music that I download from music services or any movies that I download from movie services on my PC that carry the PlaysForSure logo, I can go ahead and play back right here on this TV with no additional equipment.
So here, for example, we've gone ahead and downloaded a movie in Windows Media Video high definition from CinemaNow called "Amazon," and you'll notice with just a couple of clicks I can go ahead and have an immersive, high definition experience right here on a brand new HDTV. (Applause.)
So that's just a small example of the ways that we're working directly with the industry to make this technology more connected and provide easy access through home networking for you to access your Windows XP PC or your Media Center PC and enjoy all of your digital entertainment around the home.
Thank you for your time and be sure to check out our partners in the CES booth. Thank you. (Applause.)
Conan: Thanks, Sean. That was lovely. But I have to be honest with you, I'm confused. I'm a simple man, a fisherman from a small town. Let's apply this to my life. I live in Manhattan, I have Time Warner cable, and I don't know what all that means for me. This all looks very impressive but what about for a poor schmo like me who just has the cable?
Gates: Well, the set-top boxes that have been connected up to cable can take a new generation of hardware and software and be far better. The idea of a fast scrolling through the guide that we saw, helping you find movies, HDTV support, dual tuner support, the set-top box itself will move to a new generation.
Microsoft is one of the companies building software for that, a good partner for us on that is Comcast who's rolling out what we call our TV Foundation Edition. And so that's taking broadcast cable TV and making it even better.
Now, there's a generation that can go even further as we get more video on-demand capability and literally anybody can watch any show at any time, even the ads can be targeted to you. We call that IPTV. And no doubt this is where the world is going, it requires a lot of investments to get the networks up to this, but this is the maximum flexibility, watching different shows, picture-in-picture and really opening up creativity, the same type of creativity we've seen on the Internet side for the TV, and so it's a great way to think about the integrated scenarios, video, data and voice actually coming together.
We've been investing in software for the TV probably for longer than we should have. It's been almost 12 years that we've been building on this, but this was a milestone year, not only the Comcast announcement but also some partners, particularly from the telephone companies who are investing in these next generation networks.
Today we're announcing that Bell South has joined those companies and they'll be rolling out some of the IPTV services using our software there. Actually, the first major large commitment we had to that software was from SBC and they're really a pioneer in here, they've committed to do this in a very serious way. In fact, I'm very excited that we've got a key person from SBC here to talk about what they're doing, so let's welcome Lea Ann Champion , who's the senior executive vice president for SBC. Welcome, Lea Ann. (Applause.)
Champion: Hi, guys. Bill, good to see you. Conan, great to see you. Hi, everybody. You ready to see some exciting, new IPTV information? Well, today it's a great honor for me to be able to showcase this innovation.
In fact, at SBC we are literally changing the communications and television experience and there are a lot of features that I want to point out for you. Our strategy is going to be shared here at CES tomorrow. In fact, the chairman and CEO, Ed Whitacre of SBC, is here and will be keynote speaking tomorrow at 10:30, so all of you have an opportunity to see Ed so he can lay out for you exactly SBC's strategy of how we're going to put IPTV to work.
So here are a few things that I want you to think about and consider about IPTV. First and foremost, it's great video, as you can see right here. In addition, one of the things I want to point out with this great video experience is that SBC, as we build this network that Bill referenced, we'll bring customers four simultaneous streams of content to every home and with the most streams of content you'll see this kind of video quality. It will include HDTV, so we've already talked a little bit about HDTV today as well.
So you'll have four streams, simultaneous streams of video, HDTV, a great video experience. But there's a lot more to this. It's about convergence of voice, video and data. There's also additional bandwidth that's being built into our network to bring even the next level of high-speed Internet access for our customers, in addition to bandwidth for IP-based voice services. So it's about combining voice, video and data.
So let's look a little bit more about some of the unique and advanced features of IPTV.
One of the things I want to point out is that, as you can see quickly here, instant channel change. You can say goodbye to the two-second lag that you have today when you have a digital broadcast television experience. IPTV, the guys at Microsoft have done a great job of putting together this new capability for our customers.
In addition to that kind of feature, there are many advanced services that bring new levels of control to the consumer and one of the examples of that is that now within an IPTV household every TV in the house is a DVR television equipped. No longer do you just have one television with DVR but it's a whole house DVR experience.
In addition to that, we can reference what -- I love the name of this because it's basically exactly right, a complete video store available of content, which is right there at the control of your remote control. Because with IPTV our customers will be able to have access to a massive library of video, not just only movies and videos but also television news programs and other entertainment shows. So you've got a massive video show right at the control of the user.
You can rent that and make your purchase, so a great video show experience for customers who will have vast limits of unlimited quality of video that's going to be available to them for all kinds of video experiences.
But let's think about how you go a step further than that. With every television in your house with IPTV, every TV in your home, even though they do not have dual tuners, because of IPTV the customer will have the ability to have a picture-in-picture. Well, that can manifest itself in lots of ways and one of my favorite ways is that now when you browse, the customer will be able to see not only the program that's showing, but also it can actually show what's happening on that program at that very exact second.
So advanced features like DVR, a video store where the content is available through your remote control and mini picture-in-picture for your mini guide as you browse are some examples of some of the unique features that are coming to life with IPTV.
But I want you to stop and think for just a second about the possibilities that develop when you take the capabilities of this software and a two-way interactive broadband connection, and that's when you start seeing things take shape, and I'll show you a couple quick examples of how we can really change the entire TV viewing experience.
One of the things that we have ready for you today, and I want to say thank you to all of our friends at Major League Baseball, they've put together a great little clip to show how you can take over and give a new TV viewing experience.
Today this is how you do baseball, but with IPTV the user will have the ability to control and to actually be able to preview and see multiple events or games at one time. In addition to that, as you'll see as this clip rolls through, a customer will also be able to control the angles of the television so you can view what you want when you can see it. (Applause.) This is a great clip because it really rolls through the concept of how you can integrate data that's available about the game and literally for you sports fanatics viewing sports will never be the same in this next generation of TV viewing. All of that is changing, putting you in a way that never before, whether it's sports or any other content programs, in the driver's seat where you can control what you see and how you view it, actually control what you see and how you view it.
That's one of the levels of interactivity that's brought to you by IPTV, but I want to point out that the interactivity with this programming doesn't stop in the home. The truth of the matter is that at SBC we have a complete portfolio of service offerings for our customers including wireless. In fact, Cingular is part of the SBC family.
And what I'd like to show you to now is how you can extend from that living room experience to your handset, a wireless phone, a Cingular wireless phone, how you can do things back with your home services. And, in fact, one of the things I'd like to show you is how I can interact with my IPTV service and I'm going to actually program my DVR.
And I've already set up a selection of hot picks. These are things that I can choose or that friends can ship to me that are automatically loaded on this phone. In fact, here's a program that I'm looking for, it's called "Coral Reef." That's the one I want to see. But, you know, I'm not sure if this is the one I actually want to watch, so I think I'll look at a quick commercial of what that show is. Yeah, this is the one that I wanted to see tonight. So even though I'm not home, I'm standing on the stage in Las Vegas, I can go ahead and program the television recorder to pick the show up.
And I want to show you how easy it is. See the record button?
And I also want to point out that all of these demonstrations worked. It's a good thing, right, guys? (Laughter, applause.) Did I do it good or what?
Well, you can see here the recording is set. The final test of this demo is if I look over here on the television and to see that the "Coral Reef" actually shows that the DVR has been set to program.
Bill, it's absolutely a pleasure to work with your Microsoft team, they're doing a great job. All of us at SBC are very excited to be bringing to our customers in the very near future the great services of IP television where we're literally changing the communications and entertainment experience for tomorrow.
So thank you very much, you guys have a great show. Thank you. (Applause.)
Conan: You know, it didn't get applause when it was mentioned. I have to say for me personally getting rid of the lag time, that makes me insane. You can literally change the channel, go make a sandwich, come back and then you've arrived at your show and you can start eating. So if that can be fixed, I'm down with that.
Gates: Well IPTV fixes that.
Conan: Incredible. (Laughter.) And what about people like me who when I go away with my loved ones, I don't want to speak to them, I want to watch my television and movies? (Laughter.) I want to huddle in a corner and say, leave me alone and take the stuff that I like to watch with me, make it portable. What's happening?
Gates: Well, we're pioneering that with what we call Portable Media Center, these devices, the Samsung device, the Creative device that's come out, and offer the ability to take the shows you record on your Media Center and take them wherever you want to go.
And what we see is innovation in these devices, these things are getting smaller and more capable all the time, and we're providing more and more video sources. We've got three announcements there. MSN itself does a lot of video clips, sports, news, entertainment and they're going to make that so it's very easy to download here.
We've got probably the biggest content announcement today is our relationship with MTV. MTV Networks of course has a broad range of things, not just MTV but VH1, Country Music, Comedy Central, and a real expertise in understanding their customers, globally young people, people who care about music; they are a fantastic partner. And so they'll be working with the Windows ecosystem, the PlaysForSure, the rights management and looking at innovative ways they can come up with things that are free or subscription or download, so a really great partnership there.
The third announcement is that working with TiVo we've set it up so that TiVo Series 2 customers can get an updated piece of software that comes for free to those users and lets them transfer the TV shows that they've recorded on their TiVo device up to a PC. (Applause.) A lot of avant-garde customers here. So you can transfer it to any PC. If it's a Media Center PC you can use the remote control and navigate very easily, or you can say that you want it to be synched up and that means that it is going to show up, your shows on these devices that you can take with you.
And so between new MTV content, TiVo, MSN, we're just making this portable video scenario come into the mainstream. The devices are better and better, and although it's a little different profile than music, in some ways it's really common sense that you'll want your video everywhere.
Conan: Your team was nice enough actually a couple weeks ago to send me that device right there, but they didn't give me the software and I think they're still laughing about it. So hook me up, come on.
Gates: All right, we can do that.
Conan: So I can watch my show. (Laughter.) They'll get that one before the night is over, too.
What does all this have to do with communications? Can you tell us anything about communication?
Gates: Well, clearly, as I've said, all the different shows can work on these things. Any of the TV recording that you've got just simply shows up in a very simple way.
We also have got it so you can take a TV show and put that onto the phone as well. And here we go, we can just go in. This is actually a phone that I've gone and taken and done this recording on my Media Center and then I told it to synch down onto the phone, so there it goes.
Conan: Oh, my God, look at that.
Gates: A great show right there.
Conan: Can you say that just one more time, it's a great show?
Gates: Absolutely.
Conan: OK.
Gates: Some people don't like to stay up late, so seeing it prerecorded is a great way for them to watch it.
Conan: That's a good point, too. This enables more people to enjoy Conan O'Brien more of the time, which I think is what this convention is about this year. (Laughter.)
Gates: Absolutely.
Conan: All Conan all the time.
Gates: Another thing that we can do is that we can use this phone and browse photos, not just photos that we take on the phone, but say your wife at home has been taking some pictures and those are synching up to your Media Center. We can go in, we'll just stop this and go back to the home page, but we've got an application here that is a remote photo browser, and so it's going over essentially the wireless Internet and it can go in and find the photos that are there. So even if those are photos that you just took last night, you're off traveling, you can go and as soon as you're connected up it uses this data connectivity to get at the photos.
So this particular phone now is calling up the Media Center that we were using, so there you see all the different photos that we had of our adventures together all completely up to date.
Conan: And there's the photo we took right here tonight.
Gates: Just a few minutes ago, yep.
Conan: So my wife can take a photo, if I'm traveling, of my daughter and it can show up on my phone?
Gates: You can browse it on your phone and see exactly what the kids are up to.
Conan: That's good parenting. (Laughter.) I won't be around but I'll check my phone every now and then and make sure you're behaving. (Laughter.)
Gates: If you have to travel.
Conan: Yeah, if you have to travel.
Now, what about for someone like me who occasionally wants to use the phone -- this is going to rock your world -- but to make a phone call?
Gates: You bet. (Laughter.)
Conan: Let's say I wanted to make an actual phone call. Would foam come out of it or does it actually still do that now? (Laughter.)
Gates: No, even the phone call is a great place that we can make things better, for example being able to just say somebody's name to look up the number or having the photo in your contact list here and being able to browse through and just select by the photo.
Our Windows Mobile-based Smart Phones, where now we've got 61 operators in 28 countries offering these, there's a lot of different designs, a lot of different hardware here. The top operators, Cingular, Verizon, Sprint, T-Mobile, they've got a pretty full line of the devices. And so what we're saying is that the voice world and the data world are coming together and it's the magic of software, including the ability to play music, to play the photos, to do the rights management in a common way with what you've got on the PC and the Media Center that's going to make it the integrated experience; so a big commitment to invest in the phone device.
Conan: Now, what about other than phones I know there are other devices that you guys have been working on? For example, these are actually three separate watches; I'm not introducing a new product of three interlinked watches but these are the SPOT watches.
Gates: Exactly. In fact, these products started shipping, the first generation came out in January. This fall we had a second generation of the hardware, a lot of improvements in terms of the band, the screen, the thickness and those things. And, in fact, we've got watches here from a lot of the key partners. This is a Swatch watch, they call it the Paparazzi, a great introduction there doing a great job with that. This is a Fossil watch, really a beautiful watch. And this is a Suunto watch.
Now, each of these companies has a full range of colors and styles and options and what happens here is that you go to a PC and pick what sports you care about, what weather, what news, what traffic and based on what you select automatically that information shows up on your watch; wherever you got, we've got twice as many of these information channels now, getting great feedback from people on those, and we've got some real innovation. Suunto has come out with a watch that's got a heart monitor, Fossil has got more of these Abacus models they're coming out with, Swatch is new in the market with a variety of fashion designs there, including not only the Swatch brand but also the Tissot brand where they've done a really high-end SPOT watch.
So this is the first holiday season for this, it's going really quite well.
We're also taking the idea of the SPOT concept and moving it beyond just the wristwatch. We're saying, hey, even the alarm clock, you wake up, see the traffic, see the weather, see the sports results, any of those things. And so Oregon Scientific is a great partner here who's doing devices that will come out this year. They'll have particularly a lot of weather capability and that's for this fall. We've also got MZ Berger, who does Sharp-branded alarm clocks, coming out with some things that are pretty special, some unique features connecting up to that SPOT network.
And so in a sense you can say that's the smallest screen, the one that you can just glance at wherever you're going and so that even the watch becomes a software driven digital device that gives you the information that you care about.
Conan: Well, obviously too when people are wearing watches they care about the style and there's been a huge improvement since it was first introduced. I think I saw the first one several years ago and I was amazed at the things it could do but it looked like a breadmaker on your wrist and now it's improved dramatically. I'll never be asked back. (Laughter.)
Now, a lot of people here obviously want to talk about a very popular topic, which is gaming, Xbox. We should probably get into that.
Gates: Well, gaming is hot and this is a scenario that just keeps getting better and better and like all the scenarios it needs to be integrated, the idea that you can see what your buddies are up to in your instant messenger, see if they're available, play games on the PC and play games on a dedicated videogame.
On the Windows platform games are a big part of the software that's out there. SIMS 2 is an example of a title that's sold a million copies at retail in its first ten days, so that's a record launch by Electronic Arts. We've got a lot of online games that are doing very well. World Warcraft has now 200,000 gamers that have set up their accounts there. We've got things like Everquest where the user base just keeps growing, a lot of very dedicated users. So both standalone games and online games are good and the PC is just getting better and better at delivering those gaming experiences. In fact, people are saying to us let's make it easy to develop games for both Xbox and PC using common tools and so we've made a commitment that we're going to make that simple for people to do.
Conan: OK, now what about Xbox, let's just talk about Xbox for a second.
Gates: OK. Well, that had a great year. In fact, over the last couple of months here in the U.S. we actually outsold Sony with their PlayStation. They've been number one, they've been the leader but we're very strong, very credible. (Applause.)
Conan: You like that?
Gates: You bet.
Conan: You enjoy that, don't you?
Gates: Now it's a great competition.
Conan: It's fun to win. (Laughter.)
Gates: Our real breakthrough title this year was Halo 2. I mentioned it's 6.3 million users and that's a number where just the first day that it was sold it was $125 million. That's faster breaking than, say, the first weekend of even the most popular movie, so significant levels there.
What's really phenomenal is how much these people are coming online. You can play Halo 2 yourself, very challenging, rich storyline, tough to get to the different levels, people are very proud as they get more expertise, but they can connect up to their friends. That's Xbox Live and we've had 69 million hours of Halo game play during these last few months. And so people are really going online with their friends. These are very, very big numbers and these are the successes we'll build on as gaming moves to the next generation, building the Live capability in, connecting that Live capability up so it's not just the videogame, it's also connecting up to the PC. Those are the things that we think we can really take to the next level.
And so the consumer demand is broad. We want to come out with a generation of games that appeal to all ages and so have more genres, make it easy to sit down and play easily. This next generation of games will be the high definition games, taking these great screens and having the graphic power behind them, both PC and Xbox that really you will never want to go back. It's like if you watch sports shows in high definition, you watch great movies in high definition, then it's somewhat unsatisfying to sit there and watch those on the previous type television.
Conan: I have to say I'm probably the only person here who's not excited about high definition, because I don't know how I'm going to look when you can actually -- (laughter) -- oh, look there's his acne scar from '81, cool, but the rest of you enjoy.
So the future of gaming you see incredible possibilities obviously, you think there's big change coming?
Gates: That's right, as more and more people have broadband in the home, they've got these great screens, as we get the level of realism up, we get these new genres, make it far more sociable, let people personalize things, take photos, bring them in, take the music that they care about and bring them in, connect up to the media world in a very rich way.
And so this is new stuff, we've got a lot of partners to build the games that make it really come to life.
One of the games I thought would give you a sense of these trends and one that's just a very, very cool game is called Forza Motorsports and this takes advantage of Xbox in the online and so I'd like to ask Garrett Young, the program manager from our Xbox studio doing this work, to come out and show us what is Forza Motorsports and why is this going to draw more people in.
Young: Thanks, Bill.
So as Bill mentioned, I'm here to show you a game called Forza Motorsports. Now, this is a brand new racing simulation that we're building for the Xbox. So Forza Motorsports is a game built on the premise that people are unique. We have unique ring tones on our cell phones, unique skins on our MP3 players, unique background images on our Windows desktops.
Well, we think the same should be true in a racing game; your car is a reflection of you. When you race against other people online over Xbox Live, you don't want to show up in the same car that everybody else is racing in. In Forza Motorsports we give gamers the power to create cars as unique as they are and tonight I'm going to show you how easy it is.
So the first thing I'm going to do is I'm going to go in and get a car. Now, we have over 200 cars in this game, cars from manufacturers like Ferrari and Porsche and Nissan and Dodge and Chevrolet and Honda and Ford and more, a couple others I'll show you, a car from Mercedes, the SLR McLaren, which is a great car, that's not it, here it is. We're still in development. The Aston Marin V12 Vanquish, which there it is.
Now, I'm going to choose the Mazda RX8 car that I can handle a little bit better and my first stop is going to be the upgrade shop.
Now, as you'd expect in a racing simulation, I can get under the hood and improve my car's performance. I can make it faster by tuning the intake and exhaust, I can add a turbo or a supercharger or even in some cases with some of the cars I can swap in an entirely new engine.
So that's all well and good but my focus here in this demo is to show you some cool things that we can do on the outside of the car.
So the first thing I'm going to do is add a front bumper. Now, we've partnered with over 150 aftermarket-parts companies to recreate the same type of customization and modification options that you can make to your car in the real world. For instance, this front bumper up here from Fujita Engineering, this is one I like and I'll add to my car. If you have an RX8 in your driveway at home, you can call Fujita Engineering and order that front bumper tomorrow and get it put on your own car, so that's a pretty cool thing.
Now, I'm going to go in and add a rear wing. So now when I add these rear wings not only am I changing how my car looks but I'm also changing how it performs. I'm adding a little bit of weight to the car but more importantly I'm also adding down force on the rear of my car and on the rear tires, which is going to give me better traction and grip at high speeds. So that's the kind of performance boost that you're going to get in the real world and we've modeled that performance boost here in Forza Motorsports also.
OK, so I've added a couple parts to my car but I'm not done yet. I am now going to go in and I could go in and change the paint job on my car. I like the red paint though on this RX8 so I'm going to stick with that, and I'm going to go in and apply some decals.
Now, this is a very powerful tool, hundreds and hundreds of shapes as far as the options on the types of shapes that you can create in this tool. I'm going to try to do it quickly. (Laughter.) This is a little bit of demo karma, sorry, I'm out of system memory apparently. Yeah, so just imagine, if you will, that I was customizing my car and doing some really cool stuff.
But you know what, we can skip that part, it's a little dry, it's a little boring, I've got some feedback that said that that was kind of the slow part of the demo. What I was going to translate to and actually move over to was to pimp out a cool car for Bill and Conan and have them race against each other. So unfortunately I don't have a chance to actually show you around and spin you around the cars but you'll actually see the cars while they're racing. We built an Enzo Ferrari for Bill and it's all painted up and it looks good, hopefully it will come up on your guys' screen, and for Conan we had a few different options that we tried for Conan but we ended up with a Buick Regal GNX, which you guys will see in a moment as soon as we transfer to --
Conan: That's a lot, that's great. Thank you.
Young: 1987's finest, Conan. We felt that American muscle was --
Conan: Nothing gets the ladies like a Buick, thank you. (Laughter.)
Young: Only 547 of those were ever made, so --
Conan: For a reason, yeah. (Laughter.)
Young: -- take it easy on Bill is all I'm asking, take it easy on Bill. So just hit resume there, hit the A button there and, Conan, I think you've got a wheel hidden somewhere there.
Conan: A wheel right here.
Young: There you go.
Conan: I don't know what the hell I'm doing, I don't get out a lot.
Young: So we gave Bill the car, we gave Conan the wheel. So just the A button there.
Conan: So where am I? Am I here anywhere?
Gates: Hit your A.
Young: The green button, the A button.
Conan: Oh, the A, yeah, sorry, I got confused. (Laughter.) Oh, that's a great car, look at that.
Young: We get the most technical comedians to come on with us.
Conan: (Race demo.) (Laughing maniacally). I'm coming for you, man. Come on. Oh. It's shaking. Kind of erotic. (Laughter.) I think it's the car, it's not me. It's a piece of crap. (Laughter.) You need Leno for this segment right here. (Laughter.)
(Impersonating Jay Leno) Ah, so what do you want to do here, Bill? I had one of these in the '70s but I got rid of it. Hey, where's Letterman? (Laughter.) (Applause.)
Young: You guys did a tremendous job, thank you for helping me demo Forza Motorsports.
So I just want to request and hope that each of you can come down to the booth, we've got a really cool three screens set up there, you guys can get a chance to get behind the wheel of this game and really get a feel for what Conan and Bill were feeling right there. So that is Forza Motorsports, we will be out in April and only on the Xbox. Thanks for your time. (Applause.)
Conan: Now, there's not much left to cover, so I'm going to give you an opportunity here to wrap up, talk about what the future holds, what's your vision and how can I be part of it. (Laughter.)
Gates: Well, I think there are two ways to look at this. One is to start from the technology and say that the chips are doubling in power, look at what that means in terms of speed and graphics. The storage is doubling so the ability to store videos and music; we're really not going to be that limited, whether it's putting hard disks even down in phones or using solid state storage, you're going to have the tunes and videos that you want.
The software, a lot of breakthroughs needed there for the usability, allowing people to customize things, just making things so they're very automatic and people have no concerns about using their data on these systems, but those investments are being made, not just by Microsoft but many, many companies really getting out in front and making these things better.
But I think even better than looking at it from that technology point of view is to think of the scenarios, to think of a grandmother who wants to see what her grandchildren are up to or wants to play games and talk to them or think about organizing your time with your friends and finding neat options; those things are just going to be dramatically improved. And the consumer market is very demanding, it will have to be cheap, it will have to be simple, it will have to be things that catch on and have great word of mouth, but I think we can see here in 2005 that this is the decade it's coming together and the companies that come to this show are the ones who believe in this and there's an amazing opportunity for them and an amazing opportunity for all of us to mess around and have some fun using these great products.
Conan: It's cool to see, because I never met you before, is you're obviously very personally enthusiastic about all this. You're still excited about it.
Gates: You bet. If things stayed the same it wouldn't be, but this industry is moving fast and not only the competition but the breakthroughs make it fun. I want these things myself.
Conan: If only you had the dough. (Laughter.)
Now, I think that's pretty much it. I never get out of New York City, I don't do things like this but this I really wanted to do because I wanted to meet you and it's cool to be here at this event, so I think that's it.
Gates: Hey, good job, Conan, thanks a lot.
Conan: Yeah, thanks very much.
Gates: Thank you.
Conan: Good night, everybody. Be nice to the waitress. We'll see you around. (Applause.)