LAS VEGAS, Jan. 8, 2002 — Thirty-two years ago, the videocassette recorder was the hottest thing around. The compact disc player was big news in 1981, while the digital satellite system caught everyone's eye in 1994. Each of these innovations made their first public appearances at the International Consumer Electronics Show (CES), the 2002 edition of which continues here all this week.

Microsoft Chairman and Chief Software Architect Bill Gates and Senior Director of Business Management Steve Guggenheimer demonstrate "Mira" technology. Click for high-resolution photo

In the last few years, the consumer electronics industry's goals have shifted to make the house a more connected place to relax, work, socialize and learn. The new technologies and products being developed are simple to use, so consumers from all walks of life can benefit from the personalized experiences now being realized and developed.

Making their debut at this year's CES are a myriad of Microsoft advances crafted to bring the power of technology and the luxury of convenience into living rooms, family rooms and other parts of the home. The goal of the "connected" house, and the software that makes it possible, is to simplify everyday tasks and enrich leisure experiences. Here are examples of innovations Microsoft is highlighting at CES this year.

The Windows eHome Division is previewing new technologies code-named "Freestyle" that will extend Windows XP to offer consumers a new way to access their PC's digital media. With a new user interface and simple remote control, Freestyle will allow users to more easily control, share and access their music, videos and photos, search for TV shows, and pause and record live television using their Windows XP PC from anywhere in the room.

The Windows eHome Division is teaming up with Hewlett Packard, NEC and Samsung to design media-center PCs optimized for the capabilities of Windows XP and "Freestyle." The early version of "Freestyle" offers a glimpse into tomorrow's home, where the power of the PC provides entertainment, communication, information and control experiences anywhere in the home.

Microsoft Chairman and Chief Software Architect Bill Gates announced at CES Monday that in just over two months since its availability on Oct. 25 -- and in the face of a difficult economy -- more than 17 million copies of Windows XP have been licensed. Customer demand for Windows XP, touted as the cornerstone of the digital home, is unprecedented, and people are taking advantage of the experience Windows XP enables right now. Sales of Windows XP to computer manufacturers are more than 300 percent higher than that of Windows 98 and 200 percent higher than Windows Me over the same period. In addition, Windows XP has been honored with prestigious technology awards, including the PC Magazine Technical Excellence Award for desktop software. Business Week and PC Magazine both named Windows XP one of the Best Products of 2001.

Microsoft also announced the availability of Windows CE .NET , an operating system designed for microcomponents that take less space inside a computer, and software that occupies less space in smart devices, such as mobile handhelds, smart phones, mobile point-of-sale devices and industrial automation devices. Windows CE .NET powers devices such as Fujitsu's mobile I-Pad, Cyberbank's PC-EPhone3 and Hitachi's next generation PDA device.

Making its public debut at CES is "Mira," the codename for a set of technologies that brings the power of Windows XP into every room in the home. Based on Windows CE .NET, "Mira" is designed to be included in a variety of smart display devices including flat-screen monitors and digital TVs, which connect wirelessly to a Windows XP PC. "Mira" gives consumers the power of the PC with access to their familiar applications and personal data, including Web browsing, composing and reading e-mail, listening to music and viewing and editing digital images from any location in the home.

This year digital media is taking a dramatic leap beyond the PC to the places consumers traditionally enjoy entertainment -- their living rooms, cars and while on the go. Some of the biggest names in consumer electronics are announcing new products supporting Windows Media for the first time in DVD players and car stereos. The number of consumer devices now supporting Windows Media now tops 100.

Four leading manufacturers of DVD players -- Apex, Panasonic, Shinco and Toshiba -- will introduce models this year supporting Windows Media. This will allow consumers to play more than 22 hours of their favorite music in Windows Media Audio format from a single CD, and, on players supporting DVD-R, store more than 3,000 songs (roughly 250 albums) on a single DVD. In his 2002 CES keynote address, Microsoft Chairman and Chief Software Architect Bill Gates gave the first public demonstration of a new Windows Media-enabled DVD player, the Panasonic DVD-RV32. Gates also mentioned AIWA, Blaupunkt, Kenwood and Pioneer as leading car stereo manufacturers supporting Windows Media Audio, which delivers CD-quality audio at half the size of MP3 files.

Mobile devices such as the Pocket PC and smart phones are an important part of Microsoft's vision for consumer software, and Microsoft's Mobile Devices Division has several noteworthy activities at CES this year. These include the announcement of the official name for Microsoft's smart phone software, which was previously code-named "Stinger." It is now called Microsoft Windows Powered Smartphone 2002 . Smartphone 2002 software combines the best of the personal digital assistant and the best of the phone to create a platform to keep people intelligently connected -- whether by voice, e-mail or short message service (SMS). The smart phone platform will offer users current personal information and e-mail as well as Web-browsing capabilities.

Pocket PC 2002 , the next-generation software for personal digital assistants (PDAs), gives consumers the choice to communicate the way they want, with access to personal and corporate information, as well as music, eBooks and games to help them stay connected on the go. New accessories being showcased at CES include: digital cameras, thumb- and full-size keyboards, wireless jackets, PCMCIA adapters, Bluetooth cards and extended battery jackets with extra expansion slots that use MMC format. Microsoft plans to continue evolving Pocket PC software to incorporate new functionality, including the next wave of evolution: voice capabilities.

Microsoft is showcasing a trial version of digital video-recording enhancements for the Ultimate TV service. New enhancements being previewed include satellite Remote Record, which allows subscribers to set a recording on their UltimateTV receiver, even when they are away from home. Another innovation, Ultimate TV Movies, adds depth and ease to finding and recording favorite movies on DIRECTV. With quick movie recommendations, E! Online reviews and search tools at the touch of a button, viewers will be able to browse through recommendations and be guided to upcoming movies in a variety of regularly updated categories. Another enhancement, Auto Record, enables UltimateTV to continuously seek out and automatically record programs that match a subscriber's interests. In addition to these new capabilities, subscribers will experience improved speed and service performance.