CES curtain call: Gates delivers his last take on tech’s future by Jon Fortt @FortuneMagazine January 7, 2008, 5:05 AM EDT E-mail Tweet Facebook Google Plus Linkedin Share icons Bill Gates is offering his view on the tech landscape he shaped. Last year, the Microsoft chairman used his CES keynote to tout ideas including an in-car technology partnership with Ford. Image: Consumer Electronics Association LAS VEGAS – Microsoft Chairman Bill Gates used his last speech opening the technology industry’s biggest trade show Sunday night to announce that the software giant will challenge rivals such as Apple (AAPL), Sony (SNE) and Adobe Systems (ADBE) with new initiatives in phones, online video and the Xbox 360 gaming console. New iPod nano: up close (Photos 1-5) Nokia’s answer to the iPhone (Photos 1-7) Game-changing cell phones (Photos 1-7) The Xbox 360 in particular got a number of updates. In a bold step to make the Xbox 360 a multimedia must-have, Microsoft (MSFT) announced that European customers of British Telecom would be able to buy the console and use it as a set-top box as well as a game machine. And the Xbox platform will become a host for video downloads as well; ABC and Disney will sell TV shows through the Xbox Live service, and MGM will offer movies. Increasing the reach of the Xbox platform, Hewlett-Packard (HPQ) and Samsung will use similar technologies in devices such as TV sets. Much of what Gates talked about to open the Consumer Electronics Show wasn’t new – he spent a lot of his time on stage in Las Vegas reminiscing about his past speeches and recounting the progress Microsoft has made in the past year. Members of the press grumbled later that from a news perspective, the keynote itself was sub-par. But Gates did touch on important themes for the larger tech industry, including one that Google (GOOG) likes to trumpet: In the Internet age, tasks like data storage and collaboration will begin on the Web, not in desktop software. There were also highlights that showed Microsoft’s competitors still have plenty to fear. In a blow to Adobe, whose Flash software has become the dominant method of video presentation on the Web, Microsoft has struck a deal with NBC to present online footage from this summer’s Olympic games using Microsoft’s new Silverlight software. “It’s going to let us illustrate why TV is going to be very different,” Gates said. Further, Microsoft suggested that the revamped Zune media player, which competes with Apple’s iPod, is shaking its dud reputation. Robbie Bach, president of the entertainment and devices division, argued that the Zune is becoming “the clear alternative” to Apple’s device, and said that the company is confident enough to begin selling it outside the U.S. for the first time this spring, when Zune will be available in Canada. If the Zune is indeed gaining a following, that could cause problems for Sony and SanDisk (SNDK), which are also vying to be the anti-iPod. For Gates, this was a swan song of sorts. During most of the last decade, he and another tech icon, Steve Jobs, have chosen January conferences to present their different views of where technology is headed. Apple co-founder Jobs has held forth on the stage at Macworld in San Francisco, while Gates did so here in Las Vegas, where CES has increasingly focused on how PC and Internet technology is changing everything about how the world works, plays and communicates. But on Sunday night, half of the Gates/Jobs era came to a close. Gates, the central figure in the age of the personal computer, is scheduled to retire this summer from full-time duties at Microsoft, and dedicate more time to his philanthropic work. That means Gates offered, for the last time, his front-seat view of how technology has changed the world, and more important, what’s likely to happen next. It was the future-focused ideas that provided the flashiest demonstrations Sunday. Bach and another Microsoft manager demonstrated voice recognition in a phone that allowed them to say “movies” and call up all of the nearby theaters in Las Vegas. By then saying “two tickets to Sweeney Todd at 9:20,” they were able to make arrangements to see the show, all without the hassle of tapping through menus on a phone keypad. A final demo from Gates also offered interesting possibilities. After introducing it as something Microsoft is developing in its research unit, Gates showed off image recognition in a cell phone. Using the built-in camera, the software was able to identify that Bach was the person onstage with Gates, and that he owed his boss $20. Gates demonstrated how such technology might also be used to identify buildings along the Las Vegas Strip, and provide immersive, step-by-step directions showing where a certain restaurant is located and how to get there. Gates also displayed his lighter side. He showed a video with various Microsoft employees and celebrities lampooning him, joking that with all of the free time he’ll have after he leaves his full-time post in June, he’ll try to launch careers for which he is supremely unqualified. In the video Gates called rock star Bono, hoping to try out as a lead guitarist for U2; he also called presidential candidates Hillary Rodham Clinton and Barack Obama asking to be their running mates. In one of the funnier moments, Gates was shown in a studio rapping, “Big pimpin’, I’m Bill G.; big pimpin’, yeah, you know me” while hip-hop impresario Jay-Z looked on, somewhat horrified, from the sound booth.