Commentary on the Gates Speech from BetaNews Analysts
January 8, 2007, 12:03 AM
Scott Fulton, BetaNews: Nate Mook on the show floor reports Microsoft is preparing to unveil an HDMI-endowed set-top box version of the Xbox 360, with IPTV built-in.
Among the items being shown off at the Gates Keynote: Sports Lounge, an extra for Windows Vista Ultimate that will link with FoxSports.com to show scores and info on players in all games, in real time. Also, a full-motion desktop feature that enables users to set videos - not just photos - as their desktop backgrounds. The world will never be the same.
The advance press release, written in the past tense ahead of today's presentation, states the company will be demonstrating a device called Sync, developed in conjunction with Ford. We should see a "voice-operated in-car system" for 2008 and '09 model Ford, Lincoln, and Mercury vehicles.
Microsoft entertainment head Robbie Bach has just made this comment about Zune: "We are the number-two player already," with over a million shipped. Comment amongst yourselves as to the possible zone of reality in which that statement was made. He later added that connectivity and flexibility features are why Windows Mobile outsells BlackBerry. Sharon Fisher, who's following along with us, is not so certain of that.
More statistics from Robbie Bach: 10.4 million Xbox consoles sold to date, 500,000 units ahead of schedule. "Gears of War" sold 2.7 million games in an eight-week period. Bach mentioned a monumental attach rate - the number of games sold with each console - though did not mention the number. Independent analysts have cited an attach rate of 5, which is very good (4 is considered optimum).
Sharon Fisher, BetaNews Senior CES Analyst: That's twice they've described something as "drop dead simple." It sounds sort of ominous to me.
Scott Fulton: Another intriguing superlative: HD DVD, says Robbie Bach, is "the top selling format this year," because it has, he says, the most compelling interactive features. Subtle jab at Sun and BD-J.
Ed Oswald, BetaNews: You really get the feeling from this keynote that Microsoft, at least on the Xbox side, is firing on all cylinders. Being a half-million ahead of your projections is no small feat, especially when they're staring the behemoth that is Sony square in the face with the PlayStation 3 now out.
It seems like Xbox 360 users love the console, especially with the "monumental attach rate" comment. Although, I wish they would give a little more meat on that. All in all, I'm willing to bet Sony's beginning to get just a bit nervous.
Scott Fulton: Carmi Levy is another analyst who's watching with us. Carmi, as I'm watching the brands of PCs flip past the screen, I'm wondering whether the consumer buzz about PCs and operating systems is proportionate with what Microsoft would make it seem. This whole thing is about Vista thus far; and Vista wasn't the big thing everyone was talking about going into this show. Will Microsoft advance the football its direction with this presentation, or are they running in the wrong direction?
Carmi Levy, Senior Research Analyst, Info-Tech Research: I'm waiting for the rest of the presentation to play out before I render final judgment. But my initial perspective is similar to yours: the message is very Vista-heavy - and I suspect it's an attempt to keep the Vista buzz front and center in advance of the January 30th retail availability of the new OS.
CES is all about salesmanship, about getting the masses excited about the biggest products and services that the biggest industry players have to offer. Vista is quite certainly the biggest offering from the biggest player, and the timing of the consumer release of Vista compels Microsoft to hammer the Vista message home above all others.
We're in a bit of a lag period for Vista: it's available for enterprises, but enterprise implementation will be a long-lead process, so there is currently very little evidence of concrete migration in the corporate environment. And while we wait for consumer availability, Microsoft is using CES for one final push to keep the new OS top-of-mind and reinforce to consumer buyers why they'll want to move to Vista sooner rather than later. It's the same message that Microsoft has been delivering for months. But this is the biggest stage for one last push before the January 30th consumer release.
Microsoft is positioning Vista as a foundational technology - all other announcements will build on and connect into Vista in some way. But Vista is the linchpin of deeper penetration into the consumer electronics space, so it merits top billing in this keynote.
Scott Fulton: Thanks, Carmi. Earlier, a Ford representative was on hand to show the Sync feature, which will include the ability for a Vista-enabled automotive PC to read text aloud, to assemble playlists for music or podcasts using voice commands, and to take orders for scheduling and communications. Quoting Bill Gates, in the environment of your automobile, "you're going to want the same great things that you have everywhere else. But the car is special."
Nate Mook, BetaNews: Gates is showing a ridiculous demo of the future of the home.
Scott Fulton: He's showing off an "electronic wall" that displays a variety of stills, like a Windows desktop for your home decor.
Sharon Fisher: I have to say, this thing ["Home of the Future"] they're showing is completely unappealing to me. "Let me do things in this bedroom environment..." Hmm...
"Over My Head" is an interesting song to play as a closing.
Scott Fulton: What stands out as the main message for you, Sharon? What do you take away from these two hours?
Sharon Fisher: I was just thinking how different a speech Bill would have given about Vista to the enterprise audience, and I'm wondering how long they can have a single operating system intended for both markets.
Scott Fulton: Do you imagine people leaving this venue talking about Vista when they weren't talking about Vista before?
Sharon Fisher: Hell, no. If you have a Windows PC, you pretty much have to upgrade to Vista at some point anyway.
Scott Fulton: So this is a way to placate all those poor people who have to upgrade, regardless?
Sharon Fisher: Well, I'm thinking that for the consumer market, which is what this is, they're doing it to keep people on Windows. They can't grow the corporate market that much, so they have to look for new markets. And one of those is the consumer/home market. And perhaps they're trying to link consumer products together, along with entertainment, the same way they linked enterprise applications together.
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