Gates offers light at the end of the tunnel

Microsoft Chairman Bill Gates used his Comdex keynote address this weekend to refute the notion that the tech industry's best days are behind it.

Gates kicked off his speech at Comdex by talking about the coming age in which all manner of human activities will become digitised, from note taking to bill paying.

Gates said: "It's not just sitting in front of that desktop PC. That's very important, but that's just a piece of what we are trying to do. The magic of software is spreading out to all different devices - and those devices are connecting in different ways."

But Gates acknowledged that it is rough times for the technology industry. "On the more sober side," he said, "there are a number of things that have made this a tough year. The attitude toward capital expenditures, the overall economic climate."

Gates' speech comes against the backdrop of one of the steepest downturns since the PC revolution began more than 20 years ago. The Comdex show itself, now in its 23rd year, is set to be a smaller affair as companies are less willing to shell out for big trade shows. In a sign of the times, show organiser Key3Media said last week that it may seek bankruptcy protection.

Always one to bet on technology winning the day, Gates continued to paint a picture of an average home increasingly crowded with digital devices. He pointed, as always, to the natural progression of economics that makes digital gear ever cheaper, more powerful and more portable.

Microsoft's latest example is Dell's Axim X5 Pocket PC which, at $199 in the US, represents a new low price for a colour device running Microsoft's handheld operating system.

Such decreases in cost will finally make it possible for all kinds of objects to get digital "smarts," Microsoft says. The company's latest effort is designed to give things as mundane as keychains and refrigerator magnets some measure of intelligence.

Gates said: "At the end of the decade, a terabyte will be the typical storage on a personal computer,". He added that hundreds of gigabytes of data will be able to be stored on portable devices.

Ian Fried and Stephen Shankland write for News.com