LAS VEGAS — Jan. 7, 2007 — Speaking at the 2007 International Consumer Electronics Show (CES) in Las Vegas, Microsoft Corp. Chairman Bill Gates and Microsoft Entertainment and Devices Division President Robbie Bach showed how the company is delivering a new generation of connected experiences that are inspired by the universal desire to create community and share interests and passions with friends and family.

Gates and Bach announced several new products and services that include new Windows Vista™-inspired PCs, never-before-seen Windows Vista features, an Internet Protocol Television (IPTV)-enabled Xbox 360™ video game and entertainment system, and a new partnership with Ford Motor Co. that will extend digital experiences to the car. The company also unveiled Microsoft^® Windows^® Home Server, which provides a central place to help store, protect and access all the digital content in the home.

“As the magic of software makes it easier for people to be creators, publishers and consumers of digital content, it is expanding the way we think about community and entertainment,” Gates said. “From your living room to your car, we’re delivering a wave of new software products and services that make it easier for you to manage your day-to-day lives, express your ideas and share your interests.”

Windows Vista: New Features Revealed as Countdown to Launch Begins

With less than a month to go until the Jan. 30 consumer launch of Windows Vista and the 2007 Microsoft Office system, thousands of PC manufacturers and system builders across the globe are preparing to deliver new PCs designed to run the new versions of Microsoft’s flagship Windows and Office products. By Jan. 30, more than 1.5 million devices will work with Windows Vista and more than 2,000 products will be Certified for Windows Vista, helping to make Internet and networking connections, home entertainment and business tasks faster, easier and more secure than ever.

As a part of his keynote address, Gates provided a first look at a number of Windows Vista features and announced several new content partnerships that will enable people to explore their interests and express their creativity with greater freedom than ever. For example, Windows DreamScene™, available to Windows Ultimate customers through Windows Ultimate Extras, transforms the PC desktop from static background wallpaper into a full-motion, personalized video canvas. Windows Media Center SportsLounge in conjunction with FOXSports.com seamlessly combines live television, real-time scores and online sports media to keep people close to their favorite games, teams and players. Premium versions of Windows Vista will also offer brand-new content from existing partners and new ones, including, Nickelodeon, Showtime and Starz.

Gates also unveiled a series of exciting new Windows Vista-powered PCs that ranged from innovative desktop designs and ultra-portable models, all scheduled to be available Jan. 30, including the following:

The HP TouchSmart PC, a Windows Vista-inspired PC that introduces the convenient touch-screen experience to desktop computing, serves as a fast and easy-to-access information, communication and entertainment hub designed to fit wherever life happens: in the kitchen, family room or living room.

• The Toshiba Portege R400 is a Windows Vista-inspired signature mobile PC that incorporates innovative connectivity and display technologies to provide timely access to e-mail and appointments via Active Notifications and is built on Windows SideShow technology.
• Sony VAIO VGX-TP1 is a stylish PC that delivers a high-performance entertainment experience so users can enjoy their favorite live and recorded TV and movies or surf the Web from their sofa using the wireless keyboard or remote control.
• The Medion UMPC is an ultra-mobile PC that provides multiple input options such as a keyboard, a pen and touch capabilities and features the new Origami Experience, a user interface that optimizes entertainment and communications on the smallest class of personal computers running Windows Vista.

“Windows Vista is the catalyst for a variety of new hardware devices being made available to consumers,” Gates said. “The result will be an incredible set of new connected experiences that link our interests, our communities and our desires in ways that extend across home, work and play.”

With its powerful graphics capabilities, advanced parental controls, and connectivity to the Live games and entertainment network, Windows Vista promises to capture the imagination of 200 million hardcore and casual PC gamers alike. Titles such as “Age of Conan: Hyborian Adventures” (Eidos Interactive Ltd./Funcom) and “Crysis” (EA Partners/Crytek) take advantage of DirectX^® 10, and offer some of the smoothest, most lifelike visual experiences available on any gaming platform today. Microsoft also showed off “Shadowrun” (Microsoft Game Studios) and “Halo^® 2 for Windows Vista” (Microsoft Game Studios), the first of many titles that will enable gamers on Windows Vista to connect with their friends on Xbox 360 through the Live network. And for casual gamers, the company demonstrated a cross-platform game of “UNO!,” with some players joining from their Windows Vista-based PCs and others joining from their Xbox 360 consoles.

“Windows Vista marks the biggest investment from Microsoft around Windows games since Windows 95, making games easier, safer and more fun to play on the PC,” said Gates. “For consumers, we believe gaming is one of the top reasons to upgrade to Windows Vista.”

The development of Windows Vista and the 2007 Office release are the result of an unprecedented collaboration between Microsoft and its customers and partners. After more than 5 million beta downloads of Windows Vista and the 2007 Office release, the two products were designed with the help of millions of customers worldwide, including 50 families from seven countries taking part in the Life with Windows Vista program.

Xbox 360 and Microsoft TV: Together Expanding the World of Games and Entertainment

In a move that will combine the power of Xbox 360 with Microsoft TV IPTV Edition, Bach provided an early look at a new service, IPTV on Xbox 360. The offering is expected to deliver world-class TV experiences such as digital video recording capabilities, with gaming, movie viewing, and even voice and video communications. Tapping into an expanded set of entertainment experiences, users will be able to watch their favorite sporting event live while chatting with their friends, for example, or participate in a match on Xbox Live^® while they record a TV program in the background. IPTV on Xbox 360 is expected to be available to consumers by holiday season 2007 and will be offered by providers that are deploying TV services based on the Microsoft TV IPTV Edition software platform.

“Our goal is to make entertainment more personal, more interactive and more social,” Bach said. “IPTV on Xbox 360 and Xbox Live are powerful examples of ways we are bringing together the worlds of gaming, TV viewing and community to make it easy for people to access and discover their favorite content and share their personal experiences with the communities they are part of.”

Microsoft TV IPTV Edition continues to strengthen its position in the market with deployments under way with five of the world’s largest service providers and trials with 11 additional companies, representing a footprint across 14 countries on four continents.

Bach also showcased the strong momentum behind Xbox 360 and highlighted the company’s success in delivering high-definition viewing experiences with HD DVD. Exceeding expectations by hitting the 10.4 million-console-sold mark this holiday season, Xbox 360 is the leading next-generation games and entertainment platform. It is also the largest social network in the living room, with 5 million Xbox Live members.

In addition, strong sales of the Xbox 360 HD DVD Player and strong demand for downloadable movies and television programs are a clear indication that increasing numbers of consumers see Xbox 360 as an ideal device for connecting to a broad range of entertainment experiences. In just over a year, people have downloaded more than 100 million pieces of content to their Xbox 360 consoles, which include game content, television shows and movies.

Connecting Digital Devices and Experiences at Home and on the Road

During his keynote address, Gates announced Windows Home Server, a new software product for families with multiple PCs that want to connect their home computers, digital devices and printers to help easily store, protect and share their rapidly expanding collections of digital content and entertainment. Later this year, HP plans to deliver the HP MediaSmart Server, powered by Windows Home Server.

Windows Home Server was created to help consumers deal with the explosion in digital content. For example, 273 billion digital images were captured worldwide in 2006.¹ Today, more than 40 million homes in the U.S. have more than one PC² and one in three homes in the U.S. has an MP3 player.³ Windows Home Server automatically backs up home PCs and provides a central location for storing a family’s photographs, music, videos and documents. Using a personalized Windows Live™ Internet address, people will be able to remotely access digital content on Windows Home Server when they are away from home. At CES, companies such as AMD, Inventec Corp. and Quanta Computer Inc. will demonstrate hardware reference designs for Windows Home Server. Windows Home Server will also serve as a platform for independent software vendors to build innovative products for the digital home.

Gates also announced a partnership between Microsoft and Ford to deliver Sync, a voice-activated, intelligent means to connect personal electronic devices to vehicles, including a wide range of mobile phones, storage media, and portable music players such as Zune™ and others.

Sync, developed by Ford and based on the Microsoft Auto platform, will offer hands-free phone dialing, address-book synchronization, and other features such as the ability to read text messages through the car’s audio system. Drivers can also control their digital music players using voice commands or controls on the steering wheel. In addition, the Microsoft Auto software is easily updatable, so Sync can integrate new devices as they are introduced, with a simple software upgrade.

With Sync, Ford is using Microsoft Auto to give drivers greater control by unifying their mobile phones and portable media players into a single voice-operated in-car system. Sync is planned to be available in the second half of 2007 in 12 models of 2008 Ford, Lincoln and Mercury cars and trucks and will expand to all Ford, Lincoln and Mercury cars and trucks by the 2009 model year.