Despite a bombardment of Internet appliances, Web tablets, wireless handheld computers and Internet-enabled cell phones, Microsoft and Intel executives have used the annual Windows Hardware Engineering Conference here to mount a spirited defense of personal computers.
But Microsoft is hedging its bets. Yesterday, the company said it will establish a new division devoted to developing embedded operating systems for non-PC appliance hardware, such as handhelds and computerized cash registers.
The role of the PC is changing, Gelsinger conceded, but it is in no way obsolete. He argued that the situation is quite the opposite, with high-end software such as Windows 2000 and new Web-based technologies such as broadband Internet access and digital music downloading gobbling more PC power than ever.
This year will be one of Intel's busiest, Gelsinger said, as the company prepares to ship Willamette, Itanium and new improvements to its lower-end Celeron chips.
"In the Internet era, performance matters," he said. "Performance matters a lot."
For example, for optimum long-term performance, Windows 2000 requires Pentium III processors running at speeds of 733 MHz. "The 500-MHz machines of last year are no longer acceptable," he said, refuting the widely held belief that chips these days are generally outperforming people's needs.
Intel and Microsoft have both used the hardware conference, which draws about 3,000 manufacturers and corporate technology executives, to lay out their product road maps and to gain momentum for industry initiatives.
Last year, both companies touted their "Easy PC" initiative, designed to rid computers of crash-prone, outdated technology but at the same time making them stylish and easy to use.
The initiative has made progress in ridding computers of so-called legacy technology, Gelsinger said. This year the companies will focus on new designs and simpler interfaces.
"I'm happy to see the progress we've made in this area," he said, demonstrating Intel's Rapid BIOS Boot, which reduces PC start-up time. Gelsinger staged a PC "drag race" between Apple Computer's iMac, a standard Intel-based PC, and a BIOS-optimized PC. He encouraged the crowd of Microsoft hardware partners to root against the Apple machine, which ended up losing to the new Intel system.
"If you know how to run a Mac, you're in the wrong place," he said, drawing laughter from the audience.
Improved connection technologies also will make PCs easier to use, he said, announcing the completion of the specification for the second version of USB (universal serial bus). USB 2.0, which is 40 times faster than the previous version, will be available this year, he said.
Gelsinger demonstrated new PC designs and nontraditionally shaped PCs shipping from Dell Computer, IBM and Compaq Computer. "I really think that a year from now, these are the only PCs we'll see in the market," he said.
The Internet continues to drive PC sales, with the growing availability of DSL (digital subscriber line) and other broadband, high-speed Internet connections boosting home-networking sales. "Our vision for the e-home is that we put the Internet within arm's reach of anyone at home," Gelsinger said.
Along those lines, Internet appliances--which have gained enormous industry and consumer attention as easy, low-cost ways to access the Web and email--will extend, not replace, the PC, he asserted. "This is a case where one plus one is greater than two," he said, adding that Intel will release its own Web tablet this year.
The Internet is not only driving consumer PC sales; businesses are transitioning to the third generation of the Internet, having mastered marketing and basic e-commerce. Many companies are embracing XML (Extensible Markup Language) and other personalization tools to create integrated digital networks throughout their organizations, Gelsinger said.
"The ultimate goal is to shrink the process between thinking it and selling it," he said, demonstrating personalized desktops that include online data from financial news services integrated with email and office applications, such as spreadsheets. These integrated suites can be pushed onto any device using the wireless Internet, he said.