"Longhorn is our big investment," Gates said, calling up colleagues to show, among other things, the improved searching and printing capabilities that will come with the next version of Windows.
With search, for example, Gates said people wrongly assumed Microsoft would not make organizing files dramatically better after it delayed an all-new file storage system. But the company is able to get many of the same features by better indexing of files, rather than moving to a whole new database structure, he said.
Many of the features that Gates showed, however, are not reflected in the updated "developer preview" version that was given to attendees at thehere. A fraction of the new features will make it into an initial beta version this summer, but many may not show up until a subsequent beta. Microsoft wouldn't say when that beta version will arrive, but Gates said the company is still focused on trying to release the final version of in time to make it on PCs sold for the holiday season in 2006.
"When I see those demos, I think, 'Gosh, let's get Longhorn done,'" Gates said. But he added that quality remains the top priority and warned that Microsoft could further change the timetable for the operating system if problems arise during testing.
Envisioneering analyst Richard Doherty said Gates was too vague with the crowd of hardware makers about what is needed to fully take advantage of new OS features, including advanced graphics. For example, in describing which kinds of PCs will fit well with Longhorn, Gates merely reiteratedthat such systems should have 512MB of memory, today's level of processor and a graphics card with a Longhorn driver.
"It's not real guidance," Doherty said, adding that Gates also did not sufficiently motivate hardware makers to start doing things now to make Longhorn-based PCs a reality by next year's holidays.
"Where was the call to action?" Doherty asked.
Microsoft's effort to reduce the number of people who run with administrator privileges is one example of the features that are still being ironed out. Today, almost all users run with such privileges because they are needed to make even basic changes, but the company is reworking the operating system so that various settings can be altered while running as a standard user.
However, by this summer's beta, only the clock settings are likely to reflect the change, said Will Poole, the head of the Windows Client business. The ability to alter things such as power management and firewall settings won't come in until Beta 2, he said.
Microsoft officials said they still expect to meet their timetable for Longhorn. In an interview, Windows lead product manager Greg Sullivan noted that Microsoft added several features to Windows XP that came in only after the first beta, including the "Luna" shell interface that came in just before the second beta and the instant messaging advances that were added after Beta 2. Sullivan also noted that Microsoft released the first beta of Windows XP on Halloween 2000 and wrapped up final development in August 2001, a shorter time frame than it has laid out for Longhorn.
"Obviously, the proof will be in the pudding," Sullivan said.
Gates did promise that Microsoft's biggest-ever marketing campaign would accompany Longhorn's release. Microsoft recently announced plans for a precursor to that campaign, a "" blitz that will tout the abilities of current versions of Windows.
The company demonstrated a new XML-based document format, code-named "Metro," that it will use in Longhorn to both print and share documents. Printers that build in Metro support will be able to more quickly and faithfully render documents created in Longhorn, while users will be able to share files without needing the application that created them, Microsoft said.
The document format is likely to go head-to-head with today's most popular document-reading method,' PDF format. Microsoft's announcement "should have a lot of folks at Adobe worrying," Doherty said.
But it also represents an "all or nothing" bet for Microsoft, Doherty said, in which Microsoft is attempting to displace a well-established competitor. "It's a big gamble," he said.
Among other features Gates discussed was the ability of PCs running Longhorn to take advantage of storage that combines traditional hard drives and non-volatile flash memory. By using flash for frequently accessed information, laptop PCs will be able to get much better battery life given that substantially less power is used accessing flash than is needed to spin a hard drive.
Also, he said, Longhorn will come in a single binary for all the different language editions. Apple Computer has done that in Mac OS X, but it's a first for Windows.
Mac fans will find continued similarities in Microsoft's changes. In Longhorn, the folder that was once "My Documents" will become simply "Documents," While "My Photos" and "My Videos" will become "Photos" and "Videos." Clicking on a document icon will bring up a preview pane with added information about the file, also a feature in Mac OS X. In addition, searching and virtual folder features are similar to what Apple has done with Tiger, the new version of the Mac OS that goes on sale on Friday.
But Gates said Microsoft is doing more than just improving search, noting the capability to organize files across multiple characteristics, such as sorting documents "created by brutus" into various categories based on keywords. Longhorn users will also be able to group a collection of files into a list that can be shared with many users, even automatically using an updated version of RSS (Really Simple Syndication).
In addition to previewing Longhorn, Gates presided over the official launch of theand showed off several futuristic laptop PCs. One demo, that would be as thin as 10 sheets of paper, turned out to be little more than a mock-up. Gates acknowledged that significant hardware and software advances were still needed, but said a 1-pound, 6-inch device that combines all the power of a PC, phone and camera for around $800 is still possible a couple of years from now.
"We do believe this is achievable," Gates said.
Gates projected that while it took until 2002--two decades--for the industry to sell its 1 billionth PC, the 2 billion mark would be hit in just six years, by 2008.
"Compared to 6 billion people on the planet, 2 billion is starting to get somewhere," Gates said.
The software maker also announced it has continued to see a rise in sales of PCs with its Windows XP Media Center operating system. The company said it has now logged about 1 million new shipments since the latest iteration of the software began showing up on PCs last October. That's the same number sold for all prior versions of the OS, dating back to 2002.
"It's quite a good ramp," Gates said, adding that the current rate of sales is more like 500,000 Media Center shipments per quarter.