PC sales grew just 1.9 percent during the first quarter of 2012, according to a new report from Gartner.

The research giant had predicted sales would decline 1.2 percent during the quarter. It said sales in Europe and the Middle East were better than expected, offsetting slowdowns in India and China.

"While the PC industry has high expectations for strong growth in the emerging markets, the slowdown of these countries in this quarter provides a cautionary notice to vendors that the future growth for the PC industry cannot heavily depend on the emerging markets even though PC penetration in these regions is low," Mikako Kitagawa, principal analyst at Gartner, said in the release.

Fellow research giant IDC followed with its quarterly report, pegging PC sales at 2.3 percent, up from its forecast of a 0.9 percent decline.

IDC said hard-drive shortages from last year's flooding in Thailand continue but the large PC makers had better access, managed inventories and absorbed price increases. As a result the big vendors kept PC shipments moving while smaller PC makers saw the expected declines.

PC makers should see bigger gains later this year. PC sales historically rebound after slow periods, driven by new technologies and need to replace aging systems, IDC's Loren Loverde said in the release.

"As a result, we expect PC shipments to pick up significantly by the fourth quarter and beyond as HDD supply and pricing are normalized, Windows 8 is launched, and replacements pick up," he said.

The news foreshadows upcoming earnings reports from Microsoft -- next Thursday -- and Intel on Tuesday.

There were a few bright spots in Gartner's report.

Hewlett-Packard emerged from its internal funk and grew nearly twice as fast as the overall market and held its global lead on the PC business. Its sales grew 3.5 percent, Gartner said.

Lenovo posted a 28 percent gain, driven by sales in Europe and the Middle East and sales of business systems, according to Gartner.

Dell's sales fell along with overall sales of lower-end consumer systems as consumers were lured by Web tablets and other gadgets in the same price range.

IDC estimated HP's global growth was 3.2 percent and Lenovo's were 43.7 percent during the quarter.

In the U.S., HP sales were up 6.6 percent, Dell's were down 3.6 percent and Apple's were up 3.8 percent, according to Gartner. IDC's numbers for HP and Dell were the same, but it said Apple's PC sales were up 5.1 percent.

IDC said sales in the U.S. were slow for several reasons. Businesses are "still cautious" and consumers are evaluating different prodocts and may be waiting for Windows 8 to arrive, perhaps in the fourth quarter.

That fourth quarter - the holiday season - "will likely determine if there is any growth at all in the U.S. market in 2012," Loverde said.

In other words, it's up to Microsoft and its PC partners to deliver with the Windows 8 wave.

A few charts from Gartner's report:

If Microsoft is ever going to have its Alec Baldwin moment, it will happen because of a home-brew game called "Wordament."

Baldwin was famously thrown off a plane in December because he wouldn't stop playing an addictive word game on his iPhone.

The actor was playing "Words With Friends," Zynga's Facebook version of Scrabble played by more than 8 million people a day.

So far the closest thing on the Windows Phone platform is "Wordament," an extracurricular project of two Microsoft employees that became a surprise hit after its debut last year.

The free, ad-supported app is a twist on the word-hunt board game "Boggle." You compete with players around the world in two-minute matches and work your way up leader boards.

It's still a pipsqueak in the broader world of mobile games, with hundreds of thousands of downloads since it appeared on Windows Phone in April 2011 and on Windows 8 last month. It has tens of thousands of unique visitors a day, with up to about 650 playing together at once.

But as one of the highest-rated, exclusive games on those platforms, it's positioned to lift off. It may even draw people to Microsoft's fledgling mobile devices, at least if they're "Boggle" fans.

The game was created as a side project by John Thornton, 37, and Jason Cahill, 38, who worked on the Windows Live photo team and had offices next to each other. They built the game after Microsoft began a "moonlighting" program in 2010, encouraging employees to build Windows Phone apps in their free time.

Thornton (left) began tinkering with word games and made a New Year's resolution in January 2011 to build an app a month. One was a prototype puzzle game he showed to Cahill and asked if he wanted to help. The answer was no, initially.

Cahill (right) and his wife were "Boggle" fans who played against each other wirelessly on Nintendo DS handhelds. The more he thought about the possibilities of a computer-generated game board connected via Internet services, the more excited he became about the project.

"I went home after telling him this whole lecture on how the way you get ahead at work is by doing work and not by doing moonlighting ... and ground all weekend,"Cahill said. "I came in Monday with a basic implementation of a service and a set of puzzles and I was like, 'OK, can I help on this half' ?"

This still cracks up Thornton.

"He must have coded the whole weekend after telling me no," he said. "It was kind of funny."

Thornton said the game's popularity sank in for him a few months later, at the Kirkland Fourth of July parade. Looking over the shoulders of a row of people in front of him, he noticed they were all playing the game.

Later that month, the Xbox Live group asked them to distribute "Wordament" through the game service. The Xbox group then hired them, where they're now the principals of a new studio expanding "Wordament" and developing new titles.

I heard about "Wordament" last year from a friend and fellow "Boggle" fan at Microsoft and was planning to write about the game after the Windows 8 preview version (left) was released in February. But I waited, partly because the game froze on a Samsung Windows 8 tablet I've been using. I wondered if the newsroom installed some kind of filter, because I'd spent so much time testing "Wordament" on the tablet.

Finally I got in touch with Cahill last week, and he explained that the Windows 8 version is a prototype and they're preparing a fix for the "suspend/resume" issue I encountered. Meanwhile, the trick to unfreezing it is the "downward swipe" gesture that closes and exits Metro-style apps.

The game can be played with a mouse but it works best with touch-screens, on which you mark words by sliding your finger across the letters. Speed and responsiveness are critical, so the game's a good way to sample the performance of a phone or tablet.

"Wordament" seems to be a game that Xbox Live could use to expand on platforms such as Apple's iPhone and iPad.

I wonder if "Wordament" will end up preloaded, alongside "Solitaire," on Windows Phones or Windows 8 tablets when they appear later this year.

The original goal with "Solitaire" on Windows was to teach people to use a computer mouse, so perhaps "Wordament" will help familiarize people with the new Windows 8 touch gestures.

That would propel the game into the "Words With Friends" league.

It could also offset productivity gains promised by the new software, though, and potentially cause problems for Alec Baldwin types.

Microsoft is resurrecting one of its oldest franchises, "Flight Simulator," with an entirely new game called "Microsoft Flight" that's debuting on Feb. 29.

But instead of a new installment of the hyper-realistic, encyclopedic simulator that mostly appealed to flight enthusiasts, Microsoft built a smaller, more accessible game that's going to be offered online for free.

Planes can be flown simply by moving a mouse around, though enthusiasts can also use more realistic and complex controls.

It's also a new business direction for Microsoft's PC game business, which is using "Flight" to experiment with free online games monetized through microtransactions. About 80 percent of U.S. gamers now play such titles, mostly through Facebook, where players spend an average of $29 per month, according to Parks Associates research.

To start, the game will let people fly around Hawaii - the Big Island - in planes including a Boeing Stearman similar to one displayed at the Museum of Flight. For $20 players can get seven additional islands, new missions and an additional plane.

Microsoft will periodically offer new territories, planes and activities. The company may also extend the franchise to other devices beyond the PC. Executive Producer Joshua Howard hopes the game will draw more than 20 million players eventually.

Howard (left) leads a studio with about 50 employees, a third of whom are veterans of the ACES Studio behind "Flight Simulator" that Microsoft wound down in 2009.

Here are edited excerpts of an interview this week with Howard:

Q: Gaming on Windows has seemed to languish, maybe because so much energy was around Xbox. How much is this release a sign that the Windows game group is back, especially with Windows 8 coming up soon?

A: Some folks on my team will say Games on Windows isn't what it used to be. You're forgetting it is certainly the biggest platform for gaming anywhere, ever. I feel like the PC has been the most successful platform when it comes to gaming because gaming as a whole has become mainstream - 75 million people playing Facebook games of one form or another, that's all on a PC. It didn't happen on a console, it didn't happen on a closed mobile platform.

As Microsoft - to have built that system and allowed that to happen - we don't get to take credit for everything people do on a PC but that didn't happen because we ignored PC gaming. So I think PC gaming is alive and well in fantastic ways in fantastic ways. It's still where the heart of innovation is happening.

Q: I didn't mean PC gaming as much as PC game development within Microsoft. Perhaps the company felt it no longer needed to seed the market so much?

A: It's doing very well so that's right, maybe that's part of what it came down to.

Q: Is Flight intended to seed online services and bring people into Microsoft's online realm?

A: I like to think this is both about reimagining a franchise that we know has always been successful. I also think it's part of Microsoft the studio saying 'I want to develop this new muscle.' Maybe because we have so much of the organization focused on the console-side of the business which is more rigid when it comes to business models, you get to ask the PC side to be a little more experimental, a little more exploratory. I relish that opportunity and the team has really jumped on that. We couldn't be doing half the things we do here on a console - this is not a console game that just happens to sit on a PC. This is really a PC game and we're proud of that.

Q: Is your studio just building this title?

A: I imagine this is a group of people who will continue to bring flying experiences out over time. This is where we are right now.

Q: One you've developed new muscles, you want to keep using them ...?

A: There are a lot of really cool, exciting platforms on the horizon. I'd love to think that someday you'll be hearing from me about how we're going to bring Flight to those exciting opportunities.

Q: On tablets and other devices with Windows?

A: It could be broader than that even. As a division we no longer organize around your PC games and your console games. We're a team that's about the thrill and experience of flight.

Q: But it makes sense that your games could be on the new PC form factors running Windows ... like tablets, maybe TVs - the "three screens and a cloud"?

A: Yeah. I believe in crawl, walk, run. We're rebooting a franchise, and that was really hard. We wanted to this well. We took the time and energy to do that. Now this becomes a platform to keep going.

Q: Is it running on Azure and will it be used to showcase the platform's ability to run a massively multiplayer online game?

A: The services could be on Azure but they're not today. It turns out they didn't need what Azure provides as far as scale goes. It's less MMO in that sense. While do have what we think of as interesting and enjoyable multiplayer, it's still not that massive. (Up to 16 players can play together in an online session.)

Q: So the focus is on the PC experience mostly?

A: Yes. The way we talk about it is between the client, and the web site and the community that combines them, that's what Flight means. It's this combination of those three elements working together.

Q: It sounds like a hybrid PC game.

A: Exactly. In many respects we are like an MMO business would be run, we just don't happen to be an MMO. We're taking what is traditionally a game studio and transitioning it into an online business.

Q: Why did Microsoft take so long to resume development of MMO PC games?

A: I think the reality internally is we've continued to incubate and play and continue to try things. You just don't always bring those to market or out until you believe you've got something you can be successful with. I was excited to see that instead of trying innovate in these genres that are already well-understood, Microsoft went off and tried Kinect. I think Microsoft just put their energies elsewhere and it paid off.

Q: Will you sell the game on discs at retail?

A: Sometime maybe in the future but right now we're all in online. Retail is not something we're talking about right now.

Q: Will you get it preloaded with PC hardware?

A: Possibly.

Q: Will it be part of the game suite included with Windows 8?

A: Probably not. We deal with those separately - that's an operating-system business, we're a game publisher.

Q: Will you be able to control the game with gestures, if you attach a Kinect sensor?

A: We're not talking about Kinect support at this time but who knows.

Q: It seems like the tradeoff you made - building richer, smaller locales to explore in the game - is the loss of the full, open world that could be explored in "Flight Simulator"?

A: The bet we've made is that to the non-hardcore simmer, flying the whole world isn't as interesting when there's nothing really interesting to see or do. I do get that for some segment of the audience that was one of the values - I can fly anywhere, into any airport, 25,000-odd airports was crazy.

But I think as you try to broaden and you want to bring in not the next million or two but the next 20 million or 30 million people, you say I will err on the side of more interesting area that's dense than the same amount of content spread all over the globe. There's a lot to do in Hawaii, and Hawaii is gorgeous.

Q: It seems inevitable that you'll have a mobile version someday?

A: We may do other stuff in the future but today we're just talking about the PC version of flight. I think Flight has legs. This is a franchise that's going to keep living for a lot of years. We're going to do that by exploiting all the opportunities that are coming at us, whether that's mobile, new operating systems, new hardware. There's a lot of stuff out there and I think Flight is going to be part of that at some point.

Q: I thought the ACES studio was fully shuttered back in 2009?

A: The reality was inside the company there were already efforts underway to bring that core expertise back together with a new mandate of how they could move forward.

Q: Will Flight make more money than Microsoft's "Gears of War"?

A: I think in the long-run, this franchise will definitely make more money than "Gears." I think Gears is a great. Flight is one of those evergreen franchises in entertainment - this will live another 30 years.

Everybody loved the sleek design of Ferraris in the late 1960s, back when cars were the coolest gadgets around.

So it was monumental when Datsun introduced the 240Z in 1969 -- a Japanese sports car with Italian looks for less than half the price. It wasn't as exquisitely handcrafted, but the 240Z looked great, ran well and a lot of people could afford one.

That helped convince Americans that Datsun -- now Nissan -- and Japanese carmakers really could build sexy machines and not just boxy, cheap sedans.

There's a new generation of laptops appearing this holiday season that may have a similar effect on the Windows PC industry, which in recent years has fallen under the shadow of Apple's glamorous new hardware.

These laptops blatantly lift design cues from Apple's MacBook Air, an elegant, impossibly thin wedge of aluminum that first appeared in 2008, and they're approaching half the Air's price.

Intel calls them Ultrabooks, a brand PC makers can use if they meet Intel's criteria. Ultrabooks basically have to be thinner than a finger; run five to eight hours on a battery charge; use Intel's latest mobile processors; and have a solid-state hard drive, or SSD.

The SSD, which is like a big version of the memory card in a digital camera, is crucial because it improves performance and startup times.

I've been testing one of the first Ultrabooks, the Acer Aspire S3 (left), which takes only a few seconds to wake from sleep and less than a minute to reboot.

It's a beautiful laptop with a brushed aluminum cover, a 13.3-inch screen and a total thickness of about a half an inch. Closed, it looks like it could be a Web tablet, and it makes mini-netbooks look chunky. At 3 pounds it weighs about the same as a MacBook Air. (Below are pictures of the S3 with a Kindle Fire and a pencil)

Inside the S3 runs Windows 7 Home Premium on a second-generation Intel Core i5 processor.

There's also a dual drive system -- a 20 gigabyte SSD plus a 320 gig standard hard drive.

Blended drive setups will appear on several new Ultrabooks. It's a way for PC makers to provide the performance boost of an SSD without the crazy expense of a full-sized Flash hard drive. A spokesman for drive-maker Seagate said its new hybrid drives add only $30 to $60 to the cost of a standard laptop drive at retail.

There are other ways that PC makers are trying to keep Ultrabook costs down.

The S3 has "chiclet" style keys similar to the MacBook Air. There's a bit of wiggle in the keys and I was concerned about the small space bar and Enter key, but I could type reasonably fast without misfires. The keyboard felt just right to my wife and daughter, who have smaller hands.

With more plastic parts, it doesn't have the exquisite, machined feel of the Air. It also lacks the fast, new USB 3.0 ports (it has two USB 2.0 ports and an HDMI port) and full SSD drives used on some other Ultrabooks.

But these things depend on your perspective. If you're upgrading from a thick, standard laptop, the S3 or other Ultrabooks may be thrilling.

Keep in mind, though, that the S3 and other ultrathin laptops don't have DVD drives. If it will be your only computer, you may need to connect an external DVD drive at some point.

The S3 lists for $900, but I've noticed some discounters are already selling it for just under $850. That's expensive, especially when you can get really powerful laptops for $400 to $700, and Thanksgiving sales are just around the corner.

Still, the S3 looks like a deal if you've been pining for an ultrathin laptop and unwilling or unable to pay for one. Windows PC makers have made gorgeous, thin laptops for years, but they're usually aimed at executives and cost $1,500 or more.

A 13-inch MacBook Air costs $1,299 to $1,599, for models with 128 or 256 gigabytes of SSD storage.

You could say that the S3 and other Ultrabooks are just copying the Air.

That's partly true.

Also at play is the cost curve. Premium components that Apple used to build such a thin machine are coming down in price. That's enabling other PC makers to build similar systems and sell them for $1,000 or less. If component prices keep falling, most laptops eventually may look like this.

Intel expects 40 percent of consumer notebooks sold by the end of 2012 will be Ultrabooks. But research firm IDC says that's optimistic; it's predicting they'll take 16 to 19 percent of the consumer laptop market next year.

With consumers paying an average of $686 for laptops nowadays, according to IDC, Ultrabook prices need to fall before they take off, said IDC Vice President Bob O'Donnell. "The issue is this first batch is really expensive, unfortunately -- too expensive," he said. "In my view it needs to be $799 or less before it really gets attention from people."

O'Donnell said the combination of Ultrabooks and Windows 8 will be appealing, in part because the new operating system will further improve startup times.

Another research firm, HIS iSuppli, projected Ultrabook sales will grow from 1 million this year to 136.5 million in 2015.

For now, Intel's requirements for Ultrabooks -- especially the SSDs -- are a challenge for PC makers trying to lower prices, O'Donnell said. He met last week with Taiwanese manufacturers who are working on "Ultrabook class" systems with less expensive components that don't quite meet Intel branding standards.

Perhaps Intel will be more flexible with processor prices. It's about to introduce the next generation of the "Core" processors that are the basis of its Ultrabook strategy. These processors, code-named "Ivy Bridge," are supposed to have better performance, power savings and improved graphics.

Ivy Bridge PCs will go on sale in the first half of 2012. It's a safe bet that laptops and tablets built on the platform will be shown in January at the Consumer Electronics Show. Apple's also likely to upgrade its computers to the new processors.

Having "old" and "new" processors on the market could lead to a broader range of prices for Ultrabooks and they'll all be upgradeable to Windows 8.

Meanwhile, the S3 is worth a look if you're in the market for a laptop, especially if you need a fast, light, full-powered Windows PC. It's not the Ferrari of laptops, but it's still a pretty nice ride.

Apple will continue dominating the Web tablet market until 2014, according to a new report from research firm Gartner.

The firm poured cold water on the prime challengers, saying Android tablets are selling slower than expected because of their shortcomings and Windows 8 tablets are too late to win over consumers.

Global tablet sales are on fire. Gartner predicted 63.6 million tablets will be sold this year, up 261 percent from the 17.6 million sold last year.

Growth will be strong through 2015, when the firm expects sales to reach 326.3 million units. By then, the line between Web tablets and PCs will blur as Windows-based tablets will be on the market, but Gartner's forecast blends both platforms.

Apple's share of the Web tablet market will fall about 10 percent this year, to 73 percent, but it will continue to hold more than 50 percent of the market share until 2014, the firm said.

Google's Android platform will account for 17.3 percent of the market this year, up slightly from its 14.3 percent share last year, the firm said.

Android's growth is slower than expected and Gartner lowered its growth forecast by 28 percent. It would have lowered it further if it weren't for strong sales of low-end tablets in Asia and expectations that Amazon.com will release an Android tablet this year.

"So far, Android's appeal in the tablet market has been constrained by high prices, weak user interface and limited tablet applications," analyst Carolina Milanesi said in the release.

Gartner's cool to the prospects of tablets based on Microsoft's upcoming Windows 8 operating system. It said buzz generated at the company's Build conference last week "might be short-lived if Microsoft's push to use the new OS across devices comes at a compromise in usability. Moreover, the late arrival might limit its appeal, especially to consumers, as Apple and Android will be more entrenched by then."

The firm sees the biggest opportunity for Windows 8 tablets in large copmanies where IT departments will like the way it works with other Microsoft products.

Research In Motion's new QNX platform is "promising" but it will be a challenge for RIM to attract app developers while it's under pressure to maintain its smartphone business, Gartner said.

A chart included with the release:

With all the excitement over Windows 8 last week, one major new feature was almost overlooked.

That would be the arrival of an online sign-in system.

When you first start using a Windows 8 PC -- which much of the world likely will do within a few years -- you'll be prompted to sign in with a Microsoft online account, linking your PC to the company's data centers. By doing so, you'll be among hundreds of millions of people feeding data to Microsoft's online business group, which may finally give the scale to seriously compete with Google's search and advertising business.

You won't have to sign in this way, and you'll still be able to operate the PC as you do today.

But if you decline the digital handshake, Windows 8 won't do some of its cooler tricks, such as the ability to sign in to any Windows 8 computer and have it display and run your settings and applications.

You'll also miss out on new "Metro" style applications designed for its new tiled interface and file-sharing capabilities.

Microsoft really is boldly re-imagining Windows, and not just for mobile devices that will challenge the iPad.

The company also is pushing Windows -- the software that powers most of the world's personal computers -- to become a connected service and portal to applications running through its global network.

I'm not revealing a secret. Microsoft Server and Tools President, Satya Nadella, spelled it out Wednesday in a quote that topped that day's news release.

"In today's world of connected devices and continuous services, we are focused on helping developers build the next generation of client applications that are tethered to a back-end cloud," he said.

This may be a little disconcerting, if you like to think your PC is still personal and your computing is somewhat private.

But a Microsoft manager I talked with said logging in to online services makes Windows 8 more personal because that personalizes the system.

Pulling in your online connections also populates applications and communications features with your friends, family and other contacts.

Microsoft really is just catching up in this regard. It's also offering more privacy choices than you get with today's leading devices.

You can't use Apple's iPad or Google's Chrome computers without signing in to an account and linking the devices to those companies' networks.

Nor do you have much choice about signing in with smartphones. If you want them to be smart, you must create an account with one of the online giants. And they all use information about you to deliver advertising at some point.

Then, there's the Kindle and upcoming Android tablets from Amazon.com, the grand master of targeted marketing. You can't use its hardware at all without agreeing to let the company analyze usage, so it can continually tune its merchandising.

People sometimes get upset when they discover they're being profiled this way.

But almost everyone automatically clicks "agree" when their gadgets and apps ask if they mind sharing digital footprints. Sometimes that's the only choice to get what you expect from your expensive device.

Few really seem to care anymore that they're trading personal information for free services such as Web search, email and photo sharing.

It's more convenient to stay logged in all the time. Consumer websites just seem to work better that way, and you get to do tricks like click to share things through Facebook or see which friends are online and ready to chat.

Windows 8 lights up in all sorts of ways when you sign into Microsoft services.

Thankfully for Luddites and the anti-social, it also works fine if you don't.

I tried the untethered approach on a Samsung Windows 8 demo tablet, setting it up without signing in to an online account.

I also changed the privacy settings, declining to "allow apps to use my location" and "allow apps to use my name and account picture."

The desktop still had the new Metro style and most of the app tiles on the home screen worked fine, including the browser and widgets for displaying the weather, stocks and news feeds.

This test proved the system will work for anti-social networkers and others who prefer to use a computer that's not tethered to Microsoft's online network. But your homescreen won't flash images of your Facebook friends and other linked services.

Going this route also hobbles the breezy, simple tool for sharing files, a marquee feature of a system designed for the era of social networking. "Share" is one of the five primary control buttons on its new vertical control panel.

But I'm not sure everyone's ready for this much sharing.

Given the trend toward devices that are bound to commerce systems, it's refreshing Microsoft's giving you a choice. This makes a great-looking operating system even more appealing.

So let's hope by the time Windows 8 computers go on sale next year, and the wave of Metro applications appear, people still feel like it's a reasonable option to stay untethered.

Here's the desktop running untethered, after declining to sign-in and turning the "share" features off:

Here's the desktop running tethered - signed into Windows Live and sharing enabled. It has minimal personalization at this point, mostly just Twitter and Facebook feeds:

ANAHEIM, Calif. -- If you're interested in the Windows 8 tablet that Microsoft and Samsung developed and gave away at the Build conference, here's how to get one yourself.

Microsoft ordered 5,000 of the demo systems and they're gone.

But Samsung is going to begin selling the same device next month in the U.S. for $1,099. It will have the same configuration -- a 64 gigabyte solid-state hard-drive, Intel's second-generation Core i5 processor, a charging dock, stylus and Bluetooth keyboard -- but will come with Windows 7.

It has an 11.6" widescreen display, it weighs about 2 pounds and is a half-inch thick.

A Samsung representative said the system can be loaded with the preview version of Windows 8 that Microsoft began distributing for free on Tuesday night. It's unclear whether the same hardware will be shipped next year when Windows 8 is done, by which time hardware and component prices will have changed.

You won't get the demo apps built by Microsoft interns last summer, though, and you won't be able to load more Metro apps until Microsoft launches the new Windows Store.

If you take this plunge, make sure you've got a way to restore Windows 7, in case the preview software expires or gets glitchy.

UPDATE: A Microsoft spokeswoman noted that the Windows 7 version of the device doesn't have some of the extra sensors included on the Windows 8 demo systems and support for WWAN cell service like the demo units given to developers, which came with an AT&T SIM card and a year of free 3G service.

However, I just learned from Samsung that the slates it's selling next month do have a SIM card slot and support HSPA service and faster 4G WiMax service.

Here's the Samsung device with Windows 7 running -- it already makes me miss Windows 8:

A close-up of the desktop with Windows 7:

NEW: Here are some images from Samsung:

For comparison, here's the same hardware running Windows 8:

The new on-screen keyboard in Windows 8:

Here are the specs for the Samsung "Series 7 Slate" and prices:

ANAHEIM, Calif. -- The Samsung Windows 8 demo tablet that Microsoft handed out at the Build conference was just the beginning.

PC and chip makers at the event are showing an array of different prototype tablets running the new operating system, including tablets built on mobile ARM processors like those used in mobile phones and the iPad.

Texas Instruments is showing Windows 8 running on prototype systems based on the same processor that powers the BlackBerry PlayBook tablet:

Here's a tablet based on Nvidia's Tegra 3 quad-core ARM processor, which began shipping last month. It's going to be used on Android tablets going on sale later this year and Windows 8 systems next year.

The Nvidia system from the side:

Here's a system running Intel's upcoming 32 nanometer Atom system-on-chip hardware. An Intel rep said Windows 8 tablets with this hardware should be available for under $400:

Here's an Asus Intel i5 tablet that's now on sale with Windows 7. Intel loaded it with Windows 8:

Here's the Asus tablet from the side:

AMD brought tablets running its C50 hardware:

And AMD's MZ01 hardware:

Microsoft's booth has numerous desktops running Windows 8:

Windows 8 was also running on large, wall-mounted displays:

Apparently the Windows 8 Metro tile interface also scales up to signage systems:

ANAHEIM, Calif. -- With Windows 8, Microsoft has created a new operating system that computer makers can use to seriously challenge Apple's iPad.

The touch-centric interface on Windows 8 is refreshing, easy to understand and a snap to customize.

"Windows 8 is a bold re-imagining of what Windows could be," Steven Sinofsky, president of Microsoft's Windows and Windows Live division, said at a Monday event previewing the company's Build developer conference.

If computer makers produce tablets as gorgeous as demo units Microsoft provided Monday, and they sell them for a reasonable price, there won't be quite as much talk about the iPad vanquishing the PC industry.

But that's a big if.

PC makers will be tempted to clutter the elegant home screen of Windows 8 with promotional icons and it will be a challenge to offer ultrathin and powerful tablets in the $500 to $800 range of the iPad and the top Android tablets. The new software will also be used for the next generation of laptops and desktops.

Microsoft and its partners are also going to need to explain why people looking for a Web tablet should buy one that's a full-blown PC. Among the reasons provided Monday were the ability of a PC to connect directly to more than 10,000 cameras, printers and other peripherals, and the potential to store and load files directly on a Windows tablet.

Windows 8 will also run all programs that run on Windows 7, plus upcoming applications built for its touch-centric "Metro" interface.

The software has more than a pretty new face.

Demo versions had impressive speeds. They started up in 10 seconds or less, and they immediately showed thumbnail images of photos called up on the system, so you no longer have to wait for the images to render when scrolling through a batch of photos.

I wonder if you'll need the latest hardware to see some of these advances, but Windows bosses said the improvements will benefit even the most inexpensive PCs.

Sinofsky said one of the systems he'll use in the big public unveiling of Windows 8 today is a $299 Lenovo model that's also one of his personal machines.

But the systems used to show off the fast startup times used expensive solid-state memory, instead of spinning hard drives that aren't as fast. Gabe Aul, partner director of Windows program management, said the price of sold-state drives is coming down, though, and they shouldn't be a prohibitively expensive option by the time Windows 8 is released.

Microsoft didn't provide a timetable on Monday but the release is expected by next fall. It's complete enough for Microsoft to release a test version at this week's conference, so attendees can load the system on their own computers and begin developing Windows 8 applications.

To attract more developers, Microsoft's offering new tools to built Windows 8 applications that use programming languages familiar to Web developers, including HTML and JavaScript.

Windows 8 also provides ways for different applications to work together, so they automatically share data. Windows handles the connections, so a photo-sharing application will seamlessly connect to social networking applications if they use the interfaces.

Microsoft's also putting more emphasis on developing applications that connect to its cloud services, particularly its SkyDrive online storage service.

Using the new "Metro" interface in Windows 8 was straightforward on a review unit, though sometimes it took a few tries to launch the on-screen touch keyboard. The new browser hides controls "above" and "below" the screen, so you have to flick to call them back. This shows pages in the full screen, but it also adds an extra step to access tabbed pages and other controls.

I also found myself frequently using the single Windows button on the bezel to exit programs and return to the home screen, just as I do with the iPad's single button, because it's not always obvious how to go back in an application.

As with the iPad, I find it impossible to type at work speed on the Windows 8 on-screen keyboard -- or most any touchscreen keyboard. But it's a big, nice keyboard with some unexpected flair; there's a smiley face emoticon key fixed to the left of the space bar.

The demo unit -- a widescreen Samsung slate with 4 gigabytes of RAM, a 1.6 gigahertz Intel Core i5 processor, a docking station and a Bluetooth keyboard -- included a handful of applications written over the summer by Microsoft interns. That's neat and shows that it's not overly difficult to write the apps, but several of the apps could have used more logical controls. I was unable to stop one of the games, for instance, which annoyingly kept running in the background after I launched other applications.

There were also times when the on-screen keyboard obscured what was being typed into forms on the screen, including forms for the AT&T wireless service provided with the loaner unit and the composing window of the blog software I'm using here. The keyboard doesn't detect that it's obscuring these things, apparently, and the programs hadn't yet been updated for Windows 8.

It's early beta software so you can't nitpick too much, but it was especially frustrating that I could not get Outlook Web Access to load via the Metro interface.

On the positive side, the Metro interface is going to create a rush of opportunity for developers on the Windows platform, which continues to dwarf the reach of the iPad and Google's fledgling Chrome operating system.

During Monday's session, Sinofsky noted that nearly 450 million copies of Windows 7 have been sold and its usage overtook that of Windows XP last week. Microsoft also is seeing 542 million people sign into its online services every month, mostly for Windows updates.

Several Gartner analysts I had lunch with Monday said they expect Windows 8 will appeal mostly to consumers at first. Corporate buyers, many of whom are still moving to Windows 7, may opt to skip Windows 8 and move directly to Windows 9, they said.

Big companies may be wary of switching to a system with a radically different interface that works best with touchscreens, which cost more than standard PC displays. But their IT departments will probably be enthused about its rapid reboot times and controls that speed the process of resetting and refreshing a PC.

For traditionalists, Windows 8 can also be run with the current, traditional desktop. One of the most prominent tiles on the start screen is called "Desktop" and switches the PC in a flash to a Windows 7 style. People using computers for work may spend a lot of time in this mode, which to me feels less distracting because it doesn't have tiles showing Facebook updates and news headlines urging me to venture online and see what's going on.

On the fancy Windows 8 slate I'm testing, the traditional desktop also worked fine with Outlook Web Access.

Going back and forth between the old and new interfaces made me think of Windows 8 as having right and left brain. The new, Metro interface is more artistic and creative and the traditional desktop remains more practical.

There are some cool new features accessible from both hemispheres. One is a vertical row of five key commands, called "charms," that appear down the right side of the screen when you flick a finger or cursor past the border. They include search, settings, devices, start and share. This start button takes you back to the home screen and the primary collection of tiles.

Among the "settings" called up are power, volume, brightness and wireless connections. One nice touch is that the wireless settings will inform you when you're using a metered wireless plan, and warn you before starting a big download. That lets you choose to wait until you're connected via Wi-Fi or a wired connection and avoid using up your monthly data quota.

Another nice and geeky new feature is the improved Task Manager, the control panel used to monitor and manage system activity. In a single pane it displays how much processing power, memory, disk activity and network bandwidth applications and processes are using.

It also shows off how Windows 8 suspends inactive applications, to conserve energy and give active programs the most oomph.

The devices option is limited at this point. It provides the option to send files to someone with a nearby device, such as a PC or phone, or to output audio and video to a computer or large-screen display nearby.

So, could this be your next PC?

(Microsoft gave these to the 5,000 developers to the conference. It's not clear whether Samsung will offer them commercially; Microsoft helped the company develop the system as a developer test bed.

It has an 11.6" diagonal screen, weighs 909 grams and is 12.9 millimeters thick. It can also run dual monitors through its HDMI port, has a 64 gigabyte solid-state drive and connects to AT&T's 3G wireless service.)

Hewlett-Packard unveiled a line of new "all in one" desktop PCs, including touchscreen models that look like good candidates for running Microsoft's upcoming Windows 8 operating system.

They range in price from $399 to $899 for the base models, with screen sizes ranging from 20 to 23 inches diagonally and touches like HDMI output and slot-loading disc drives on some models.

HP already offers some of the nicest all-in-one Windows machines, which stuff the computing hardware behind the monitor. They're not as gorgeous as Apple's iMac but they cost around half as much, which puts the convenient "computing console" design into reach for mainstream buyers.

There's growing interest in this style of PC, according to market data HP provided in its release. During July, 34 percent of consumer desktop sales were all-in-one systems, according to NPD.

Business users also plan to buy more all-in-ones, which take up less space and don't need a bunch of wires connected. Among "commercial PC users," plans to buy an all-in-one will grow to 15.7 percent from 9.9 percent over the next 12 months, according to IDC research.

"The popularity of the all-in-one form factor continues to grow, and HP's contribution to this market is significant," Todd Bradley, executive vice president of HP's personal systems group, said in the release.

Yet HP is still thinking about jettisoning its PC business under a reorganization announced last month that walloped the company's stock.

The systems announced today include redesigned TouchSmart desktops - the more powerful models with touchscreen displays. They have a silver external frame design and base, upgraded "Beats" audio systems and screens that tilt back up to 30 degrees.. They also come with new version of HP's desktop software that emulates the Mac desktop, with application icons spread across the bottom of the screen.

The new PCs - especially the ones with the powerful, latest-generation Intel Core processors - will presumably work well with Windows 8, which has Microsoft's "Metro style" interface displaying a group of large tiles on the desktop. They are tapped or clicked to launch programs, and can be rearranged and customized, similar to the way you can change the display on phones running Microsoft's Windows Phone 7 software.

HP didn't mention Windows 7 at all in its release - perhaps because of its cool relationship with Microsoft - and declined to comment specifically on whether the new systems are being designed with Windows 8 in mind. It didn't mention anything about offering these PCs with its WebOS software, although that was the direction it was headed earlier this year.

The emailed response to my question about whether the new touch computers were designed with Windows 8 in mind:

"HP knows people expect a lot from their technology - from the overall design to the user experience. Our new all-in-ones were designed with this in mind, combining a full featured PC and a high definition display into an elegant, modern design that complements the user's environment instead of trying to define it."

HP also updated are the designs of its lower-end all-in-one desktops without touch input. The $399 models is rounded and funkier looking, like the budget all-in-one "net tops" offered by companies such as Asus, MSI and Lenovo.

Only partial details of the hardware were available, but here's what I was able to find out about the lineup and processors:

Omni 120, 20" screen, available Sept. 21, starting price of $399.

- Base configuration includes: AMD dual core processor, 2GB memory, 320GB hard drive, ATI Radeon graphics, wired keyboard and mouse

-Base configuration includes: Intel core i3 processor, 4GB memory, 750GB hard drive, Intel HD graphics, wired keyboard and mouse

-Base configuration includes: AMD dual core processor, 2GB memory, 320GB hard drive, ATI Radeon graphics, wireless keyboard and mouse

-Base configuration includes: Intel core i3 processor, 3GB memory, 500GB hard drive, Intel HD graphics, wireless keyboard and mouse

-Base configuration includes: Intel core i3 processor, 4GB memory, 750GB hard drive, Intel HD graphics, wireless keyboard and mouse

Also announced were two new TouchSmart models for business customers.

Here's the $399 Omni 120:

Here's the $699 TouchSmart 420:

The $799 Omni 220:

A side view of the $899 TouchSmart 520:

Microsoft is showing off new Windows hardware at a Tech-Ed developer conference in New Zealand, including a quad-core slate device and laptops with flexible metal screens.

Blogger Alan Burchill posted photos of the hardware at his blog, which I learned about via Mary Jo Foley.

The hardware will probably be fully unveiled in September at the Build Windows event showcasing Windows 8, which is coming out in 2012.

But the quad-core tablet device will come out sooner, by the end of the year, running Windows 7, according to a Microsoft-produced video (below) from Tech-Ed that Mary Jo called out. She also speculated that the quad-core devices could be hardware that developers are given at the Build conference to test Windows 8 and start developing applications for the new operating system.

Qualcomm, Intel, Nvidia and AMD all announced quad-core mobile hardware earlier this year. Nvidia was to begin producing its quad mobile processors in August and Qualcomm was going to begin shipping quad-core Snapdragon systems by the end of the year, according to Silicon.com.

Pricing of the Windows tablets wasn't disclosed but the video provides clues to selling points that Microsoft will emphasize to compete with the iPad and other tablet devices.

One of the devices shown has a replaceable battery that is described as being more sustainable than the fixed iPad battery, and all the Window devices have enterprise management tools. Another has 1080p video and all-day battery life, and the laptops highlighted have solid-state hard drives for ultrafast startup.

Reuters added to the growing pile of rumors about upcoming Apple hardware with a report today on a cheaper version of the iPhone 4 that could launch "within weeks."

The report said Asian suppliers have begun manufacturing a model with reduced memory - 8 gigabytes instead of the current entry-level 16 gigs.

It's unclear how much the cheaper iPhone would cost and where it will be distributed, though it may be headed for emerging markets.

The report, citing "two people with knowledge of the matter," said Apple will also launch an upgraded version of the iPhone 4 around the end of September. It's been dubbed the iPhone 5, though it's basically the same chassis as the iPhone 4 but with a larger display, better antenna and 8 megapixel camera, the report said. That would bring its specs closer to carriers' flagship Android and Windows Phone 7 devices.

Other sources have been reporting that Apple's testing an LTE version of the iPhone but it apparently won't go on sale until sometime in 2012. That's to be expected since the two largest wireless companies are now operating LTE networks and Apple's a major phone manufacturer. What would be surprising is if Apple weren't yet testing LTE technology.

There's also a very thinly sourced report out of Japan about Apple releasing new Macs by the end of the year. There's speculation that it's a refresh of the MacBook line.

It also seems likely that Apple will eventually offer touchscreen PCs that can take better advantage of touch apps developed for the iPhone and iPad.

My guess is that Apple will time the phone launches to take the wind out of Microsoft's Windows Phone 7.5 "Mango" launch and the debut of the first Nokia Windows phones, which may surface by October.

Similarly, it could time the unveiling of new Macs to steal thunder from Windows 8 and the new generation of Windows PCs running Microsoft's new operating system. The full unveiling of Windows 8 is expected at a developer conference beginning Sept. 13.

Both Windows 8 and "Mango" phones will be highlighted at the Microsoft conference, which is a major event for the company's new mobile platforms. So you can expect the flow of disclosures about exciting new things from Apple and Android will increase in the coming weeks.

Ceton's going outside the box.

The family-run Kirkland hardware company today announced an external, plug-in version of its TV tuner for Windows PCs.

Called the InifiniTV 4 USB, the $299 gadget has four tuners that can simultaneously stream four live high-definition channels at once.

It's designed to work with Windows 7 PCs that include Media Center. It also accepts CableCard devices provided by cable companies.

The setup lets you replace cable company set-top boxes with a PC, which can stream the live and recorded TV around the home using "extender" devices such as an Xbox 360 console.

Pre-orders for the device begin Aug. 19 from a few online retailers. Broader available is expected in September, and shipping is planned to begin Sept. 19.

It looks like a cool device but buyers may think about waiting until shipping begins. Ceton's tuners are much appreciaed by Media Center enthusiasts but the company's initial production last year took than expected.

The company also announced today that the price of its internal quad tuners is now $299, down from $399 when they debuted in May 2010.

Microsoft is rolling out the digital red carpet for the full Windows 8 unveiling next month the company's developer conference.

Windows boss Steven Sinofsky today posted the first item in the "Building Windows 8" blog, where his team will "begin an open dialog" with beta testers who will start using the software in the coming months.

Sinofsky said the new operating system "reimagines Windows for a new generation of computing devices, and will be the very best operating system for hundreds of millions of PCs, new and old, used by well over a billion people globally."

He didn't reveal much about the company's new flagship product but promised to share more details about its features "in the next few weeks."

The timing disclosed in the blog is the biggest news - the feature disclosures indicate the new operating system is nearly done, and the beta testing comment tracks with expectations that a test version will be released at or shortly after the Build Windows conference starting Sept. 13 in Anaheim.

The blog is an updated version of the one Sinofsky produced ahead of the Windows 7 release (it began on Aug. 17, 2008). This time there's also a companion Twitter feed - @BuildWindows8.

The new blog is apparently also intended to address frustration with the slow dribble of information about the software that will be the cornerstone of the PC industry for much of the next decade.

Sinofsky explained the approach to disclosure:

"We've heard people express frustration over how little we've communicated so far about Windows 8. We've certainly learned lessons over the years about the perils of talking about features before we have a solid understanding of our ability to execute. Our intent with this pre-release blog is to make sure that we have a reasonable degree of confidence in what we talk about, before we talk about it. Our top priority is the responsibility we feel to our customers and partners, to make sure we're not stressing priorities, churning resource allocations, or causing strategic confusion among the tens of thousands of you who care deeply and have much invested in the evolution of Windows. Rather than generating traffic or building excitement, this blog is here to provide a two-way dialog about the complexities and tradeoffs of product development."

If you're not among the crowd waiting for the next iPhone, Research in Motion today announced the first three BlackBerry smartphones based on its new BlackBerry 7 operating system.

Simultaneously, Qualcomm announced new branding for its Snapdragon mobile hardware, which could make it easier for people to choose between the flood of new smartphones and tablet devices coming to market. Its new branding will also likely help people shopping for Windows 8 devices next year.

Qualcomm's S1 category will have single-core processors with speeds up to 1 gigahertz, according to a writeup at EE Times.

The S2 will also be single-core, up to 1.4 GHZ and support 720p video and stereoscopic 3D displays.

The S3, used in the HTC Evo 3D and HP TouchPad, will go up to 1.5 GHz and have dual-core options.

The upcoming S4 line will be dual or quad-core, run at up to 2.5 GHz and support LTE networks.

I'll bet the S4 will be used in upper-end Windows 8 tablet PCs when they appear next year. Qualcomm has been a key partner for Microsoft on both Windows Phone 7 and the development of full versions of Windows that will run on mobile hardware.

The EE Times report said 20 companies are developing Snapdragon-based tablets, among 375 current and future devices using the hardware.

RIM reportedly used Snapdragon for its new BB7 devices, but it's not using the new branding or even calling out the chip manufacturer in its release today. That may be because the devices were delayed when RIM made a late switch to Qualcomm's platform.

Still to come -- next year perhaps -- are phones based on RIM's QNX operating system, which is used in its PlayBook tablet.

The new phones announced today all have touchscreens and two have hard keypads. They include the Bold 9900 -- at 10.5 millimeters, the thinnest BlackBerry yet -- plus two Torch models. The Torch 9810 has a slideout keypad and 3.2-inch screen, and the Torch 9850 has a 3.7-inch touchscreen (and a little curve like the HTC MyTouch phones ...).

RIM claims that the phones' browsing is up to 40 percent faster than BlackBerry 6 phones and 100 percent faster than BlackBerry 5 models, because of their faster hardware, new OS and improved WebKit browser engine.

They're supposed to be available from wireless companies later this month.

LOS ANGELES _ Microsoft will partner with regional cable companies to bring live TV onto the Xbox, a new feature that it announced Monday at E3.

That means the TV services will be provided through cable and satellite companies, and Xbox owners will need to subscribe to their services to get the live TV onto their game console.

That's according to Mike Delman, vice president of global marketing for Microsoft's interactive entertainment business group.

During an interview in Microsoft's elaborate, two-story booth at the show, Delman also talked about Skype on the Xbox, Kinect's new capabilities and how Xbox Live is going to become an entertainment service for Windows 8 PCs.

Here's an edited transcript of our conversation.

Q: Do you feel you've got as much at E3 as the other guys?

Definitely. We don't have an announcement like a new console but the combination of the games for the hardcore, starting to answer the question about the Kinect for the core, and having a lot more Kinect for broader audiences and the live television has played real well.

Q: Some of your announcements were just a tease, like live TV coming this fall to Xbox. Did you hold back details because partnerships aren't done yet?

We have partnerships in certain places. It's kind of ironic we have a lot of international partnerships before we got some of our U.S. partnerships done. The reason we talked about it is doing the platform work - doing voice, doing Bing search, getting the UI to be a modern UI, is really the hard work. Layering in the content isn't as hard, so it's a natural sequence.

Q: The interface seems designed to plug in another tile when you get a new content partner.

Yes, bringing in the live content - a lot of people are just layering in tonnage, they're not putting interactivity and discoverability in it. Getting the interactivity and discoverability built, so the content can sit on top of it - getting the platform work done is the hard part.

Q: Will live TV be universal, or will it be regional TV services provided by whoever your cable provider is?

It will be tied to either a satellite broadcast company or a cable company. So in international markets, you'll just have one provider. In the U.S., it will be bifurcated by region, by market. You'll be a Comcast guy (in Seattle), for example.

Q: So you'll have to be a Comcast subscriber, similar to the way you need a subscription to get the ESPN content on the Xbox now?

Yes.

Q: Will the Bing search be full Web search or just for entertainment?

It will be full search on what you have on Xbox Live. So anything that's available on Xbox Live if you're a gold subscriber it will search all of that, it won't go out and search the Web.

Q: Why not add Web search as well?

Listen, when we've got tens of millions of pieces of content just on our service, being able to search that - music for example, we've got 11 million music titles now - just mastering that in a bunch of different languages is a big priority. People at this point have other ways to get out to the Web.

Q: It seems like you could point the search at Bing's entertainment channel.

It's just not in the plans.

Q: Because you are using Bing, can you also serve ads against the results?

That's not part of the plan but it can be done. A lot of it will probably be serving ads within the content more than within search.

Q: It seems to be mostly about utility, making search easier than pecking out letters on the screen.

People will be doing stuff with their voice in probably a quarter the time it takes to go through the menu with the controller.

Q: With hardcore games, Kinect is still doing auxiliary things mostly, rather than controlling the main action. When are we going to see that?

People need time to build a core, triple a title from the ground up with Kinect. People are starting to build core games from the ground up. The core doesn't want the controller to come out of their hand, necessarily. ..In a way I think voice (with a controller in hand) will be as powerful or more powerful to the core than will gestures, and the gestures won't be the sweeping gestures you have in the broader Kinect. I think they'll be more pointed gestures like a head-fake or a head-butt. ... People are being very smart about doing something that will enhance the core experience rather than totally change it.

Q: So will "Halo 4" be a Kinect game?

I'm sure we'll have some Kinect in it but we're not that far along.

Q: We've seen voice and gesture controls but not much use of Kinect's scanning capability.

The scanning actually wasn't fully enabled until the "Fun Lab" stuff unveiled (Monday).

Q: I also wondered if scanning or the finger tracking you've shown here would need new hardware with better sensors.

No, you can actually do that stuff now. Some of the things that will be interesting in the next generation of sensor will maybe a more high-definition RGB camera so the video conferencing is better than it is now. Skype, if it comes to fruition - you can see a lot of possibilities.

Q: I was surprised we didn't hear about Skype in your E3 press conference, but I guess the deal hasn't closed yet ...

I'm probably out of bounds talking about it.

Q: Maybe you'll announce Skype on Xbox at CES in January?

Whenever it clears, there's a lot of possibility with that.

Q: Because there's a new Nintendo console that runs hardcore games coming, will people hold off buying an Xbox or adding Kinect to their console?

I don't know what the reaction's going to be relative to their own platform. All I know is we're in the fifth to sixth year of our platform and platforms have never grown in the fifth or sixth year at what we're seeing. Other platforms is not what we're focused on, we're focused on how do we make Kinect, how do we make Live as compelling as possible. In a way a lot of what's going to happen is the box doesn't become the focus going forward, it's what is the sensor, what is the handheld, what is the phone companion, what is the service companion and what are the experiences.

Q: Speaking of phone, I was surprised we didn't hear about connections between Xbox and Windows Phone here at E3.

Live has been successful on the Windows Phone, Live will be built into the PC; it will be the service where you get your entertainment. We were talking about it - you will not just see consoles and handhelds at this show next year, this show's going to morph into other devices.

Q: Will Xbox offer games on certified phones, similar to what Sony's PlayStation is doing with Android phones?

We think there's a lot of potential on the Windows phones. With the Nokia relationship, we're going to have a lot more distribution of phones and Live will be the primary entertainment service. I think that's going to be a good play for us. If we have that and the PCs to leverage, that will be a big Live base. It's our job to make 'buy a movie in one place and play it everywhere, buy a game in one place and play it everywhere.' Making things portable through the devices will be a big focus of ours.

Q: Will Microsoft's Zune service continue building up its video and music stores, or will you be working more with partners running content stores?

We're very committed to offering music and video and TV shows on our own service through Zune.

Q: I don't think I heard the "Z" word in the keynote. Are you phasing out the Zune brand?

In general I think what you're going to see is us talking about 'music' and 'video.' I think what we're coming to the realization about is putting brands on top of brands on top of brands is not as, you know - if you want to look for music, just knowing it's under a category (music) is a good thing.

Q: Speaking of branding, Xbox brands are all over Qwest Field. Are you going to go the next step and name the whole stadium, taking that over from CenturyLink?

Not that I know of. I'm a little worried we might own the whole city of Seattle if we keep doing sponsorships with everybody.

Q: How will your services and content be part of Windows 8?

There will be a lot of similarities in design and service philosophy. Whether it's us or Apple or anybody else, people want to be able to navigate through multiple devices in a certain ecosystem very seamlessly so we're committed to that.

Q: Will Xbox Live be your cloud media service that works with your Windows PC as well as your phone and Xbox?

Xbox Live will the pervasive media service across devices.

Q: Right now it's a little confusing - you've got Xbox Live, SkyDrive storage and other online places for media.

We have a ton of assets. Unifying the assets will be good for us and good for consumers.

If you're on the edge of your seat, waiting for next week's expected reveal of the Windows 8 interface by Steven Sinofsky, Bloomberg added a few more details today.

In a report citing three unnamed people "with knowledge of the company's plans," Bloomberg reported that Sinofsky will show the new software running on a touchscreen tablet based on an Nvidia Tegra chip.

Nvidia was on hand in Jauary when Sinofsky announced at the Consumer Electronics Show that the next version of Windows will run on the tiny chips powering mobile devices such as smartphones and tablets. A Tegra chip also powers Microsoft's Zune HD player.

Mary Jo Foley has a good rundown of the rumors, reports and whispers about Windows 8, including a tip that it may reach its internal build milestone June 11.

Expect to hear more about the next version of Windows next week.

It was just announced that Steven Sinofsky, president of Microsoft's Windows and Windows Live group, will speak at the All Things D conference next week in the Los Angeles area.

Sinofsky [below] has a longtime relationship with conference co-host Walt Mossberg, the Wall Street Journal's personal technology columnist.

The timing is right for another peek at Windows 8 or whatever Microsoft decides to call the next version of its flagship operating system. It's expected to go on sale, along with a wave of new PCs, in early 2012.

At the Consumer Electronics Show In January, Sinofsky gave a technical preview of the software, showing that it runs on small mobile device hardware.

A fuller preview is expected at a Windows developer conference that Microsoft's holding in Anaheim in September.

Perhaps Sinofsky will stoke anticipation -- and further ties with Mossberg -- by using the D9 conference to reveal more details of Windows 8 such as its interface design.

Sinofsky is likely to be asked to clarify some of the details about Windows 8 that were released by Intel. A manager revealed there will be different versions of the software and different application compatibility for systems based on traditional x86 computers and those running mobile ARM processors.

Steve Ballmer gave him an opening, dropping a few tidbits at a developer conference in Tokyo today, Mary Jo Foley noted this afternoon. Ballmer said the new OS will be released in 2012 and he called it Windows 8, although that may not be the final name. From his speech:

We're obviously hard at work on the next version of Windows. Windows 7 PCs will sell over 350 million units this year. We've done a lot in Windows 7 to improve customer satisfaction. We have a brand new user interface. We've added touch, and ink, and speech. And yet, as we look forward to the next generation of Windows systems, which will come out next year, there's a whole lot more coming. As we progress through the year, you ought to expect to hear a lot about Windows 8. Windows 8 slates, tablets, PCs, a variety of different form factors.

D9 co-host Kara Swisher announced Sinofsky's appearance today, but held back on previewing whatever news he'll make next week. Swisher said Sinofsky "will talk about the future of Windows in the era of all kinds of new devices and the cloud."

Microsoft spokesman Lou Gellos had no details to provide, beyond confirming Sinofsky's appearance at the event.

The conference runs Tuesday through Thursday.

Other speakers include a raft of CEOs: Hewlett-Packard's Leo Apotheker, Twitter's Dick Costolo, AT&T Mobility's Ralph de la Vega, Disney's Robert Iger, Zynga's Mark Pincus and Reed Hastings of Netflix. Others include Google Chairman Eric Schmidt and Sinofsky's old co-worker, Nokia Chief Executive Stephen Elop.

Microsoft buying Skype is like Seattle buying Italian streetcars.

On the surface, it seems like an outrageously expensive indulgence.

But if you can ignore the insane amount of money being thrown around and focus only on how it will help a few businesses, it makes some sense.

Microsoft already has powerful and widely used software for making phone and video calls and communicating over the Internet. Its messaging systems are among its crown jewels and used by far more people than Skype.

Similarly, Seattle is served by a vast and reliable bus system and is building up a light rail network.

But it still decided to spend $60 million - not counting priceless right-of-way - on streetcars that duplicate several bus routes. Sound Transit's going to spend another $132 million more more streetcar service.

Some people think the streetcars are neat, and they add flair and freshness to the mix of infrastructure in Seattle. But they'll never carry as many passengers as Metro and they'll probably never pay for themselves.

The trolley is largely an amenity, increasing the appeal of commercial property mostly owned by Paul Allen.

City leaders who took flak for this quasi subsidy may now feel vindicated by Allen's success redeveloping South Lake Union. The area along the trolley route has transformed into a vibrant, active neighorborhood anchored by Amazon.com's new headquarters.

You can't say the area blossomed because of the trolley but it helped.

With Skype, Microsoft now has a groovier, Web-native service that complements its established, industrial-strength communication systems.

Skype and particularly its video calling capabilities will be a focal point for the bundle of online services Microsoft will offer to consumers and businesses. Having one killer app in the bundle is enough to get people to enter Microsoft's online realm, or at least prevent them from logging into a competing suite of online services.

My guess is that Skype and video messaging will also be a cornerstone of Windows 8 or whatever the next version of Microsoft's flagship operating system is called. It's designed to work well on portable devices running the tiny processors used in smartphones, where video calling is coming to be expected as a standard feature.

Apple and Google have already developed video calling services for mobile devices and PCs but they don't yet have the critical mass of Skype. Microsoft has struggled to build a critical mass in search and now it has a head start as the next phase of online messaging is developed on fast, new 4G wireless networks.

Meanwhile Microsoft's going to use Skype to boost the appeal and reach of its Xbox, phone, Web mail and communication software products.

In its release, Microsoft noted that Skype has acquired the intellectual property powering its network. Perhaps that's a signal that Microsoft will assert its ownership of the patents, which could limit what competitors can do in the space or require them to send royalties to Redmond.

Skeptics expect Microsoft to fumble Skype somehow. To avoid this, Microsoft took the unusual step of creating an entirely new, autonomous group for Skype, giving the relatively small business organizational stature comparable to that of the massive Xbox, Office and Windows groups. Skype Chief Executive Tony Bates will be president of the Microsoft Skype Division, reporting to Steve Ballmer.

Microsoft actually has done pretty well with its messaging acquisitions. Key elements of Outlook were acquired, and it's now the most widely used email system in the world and an essential tool for most business PC users.

Microsoft also spent crazy money buying Hotmail in 1997 for around $400 million, when it was competing with AOL and Yahoo and was building out its suite of dotcom-era online services.

Microsoft's anxiety about falling behind Apple and Google no doubt led the company to overpay for Skype. But if the team in Redmond can avoid crashing their new trolley and it helps deliver a few big hits, the cost won't matter in the long run.

If you haven't upgraded to a smartphone running Qualcomm's 1 gigahertz Snapdragon processors yet, there's no rush.

Dual-core models are just arriving, and Qualcomm just announced a quad-core, 2.5 gigahertz beast to arrive in early 2012.

The capabilities of the new APQ8064 processor blur whatever's left of the line between mobile phones, tablets and PCs.

They also preview what's coming to smartphones and tablets shown at next January's Consumer Electronics Show:

-- 12 times more power and 75 percent lower power usage than the first Snapdragon.

-- Quad-core graphics processor "for a console-quality gaming experience." (Qualcomm's chief executive hinted at this during HP's WebOS launch last week).

-- Support for cameras with up 20 megapixel resolution.

-- 3-D stereoscopic photo and video capture and playback.

-- Full 1080p HD and 3-D video output to large screens, via HDMI.

-- Integration with LTE/3G radio modules.

-- Support for PC-type DDR3 memory, plus PCIe interfaces and multiple USB ports.

-- Support for near-field communication.

Snapdragon processors are used in many of the latest smartphones, but the quad-core model seems aimed at tablets and other mobile computers as much as phones.

Qualcomm's announcement said it will provide computer makers with a platform "that can meet all of their design configuration needs for tablets and next generation computing and consumer electronic devices."

This hardware hints at the sort of mobile computers that will use Windows 8, or whatever Microsoft calls its next major operating system. Microsoft announced in January that it's designing the software to run on this kind of system-on-chip hardware.

With a 2.5 Ghz chipset the size of a matchbook, your next PC may be the size of your phone, and your phone may be more powerful than your current desktop.

SAN FRANCISCO -- Hewlett-Packard on Wednesday outlined a billion-dollar bet to reshape its huge personal-computer and mobile-device business to be more like Apple, using an in-house operating system rather than Microsoft Windows.

It's a blow for Microsoft to have its largest customer -- and the world's largest PC maker -- reject Windows for its new push into the fast-growing mobile-device business.

But shoppers may benefit from the increased competition and new options coming later this year.

HP plans to release two phones this spring and a tablet computer in the summer, all based on the latest version of the WebOS software the company acquired when it bought Palm last April for $1.2 billion.

HP's tablet -- the TouchPad -- joins a flood of tablet computers to be released this year, including new versions of Apple's iPad, devices running Google's Android software and Windows-based tablets from Dell and other major PC makers.

Research firms forecast more than 50 million tablet computing devices will be sold this year. Gartner expects 64.8 million will be sold globally, rising to 154 million in 2013.

"These things are proof that the future is really wide open when it comes to growth and opportunities in the mobile space," Qualcomm Chief Executive Paul Jacobs said during the HP event.

The TouchPad was the highlight of a splashy media event in a waterfront pavilion Wednesday morning.

Yet HP made clear it was launching more than a few devices. It was presenting a new platform it expects to rival Windows, Android and Apple's iOS software used in the iPhone and iPad.

The company aims to build the largest community of connected devices in the world, creating a big draw for software developers, according to Steven McArthur, senior vice president for applications and services.

"Virtually no other company could credibly put forward such a goal," said McArthur, a former president of Expedia.

HP emphasized that the WebOS platform can be pushed through its vast network of customers, partner companies and retail outlets. The Palo Alto, Calif., company has more than a billion customers and distributes its products through 88,000 stores around the world.

It's going to count on wireless phone companies to help move the TouchPad, though. Verizon and others will start selling the device in summer for a price somewhere below $800.

The 1.6-pound TouchPad has a 9.6-inch diagonal display with 1,024 by 728 resolution and a front-facing camera for videoconferencing. It's powered by Qualcomm's newest dual-core, 1.2 gigahertz Snapdragon processor and will come with 16 or 32 gigabytes of storage.

It will be available first with Wi-Fi and later with 3G wireless service through multiple carriers.

The new phones include the tiny Veer, about the size of a credit card with a 2.6-inch screen. It has 8 gigabytes of storage, a slide-out keyboard, HSPA+ wireless and an 800 megahertz Snapdragon processor. It will go on sale in "early spring."

"Never before has a smartphone done so much and felt so little," said Jon Rubinstein, the former CEO of Palm and now an HP senior vice president.

Rubinstein also showed the Pre3, a larger phone with a 3.6-inch diagonal screen, slide-out keyboard and HSPA+ and EVDO rev. It runs on a 1.4 gigahertz Snapdragon processor and will be available this summer.

Rubinstein said that with WebOS, the company aims to transform how people think, feel and connect to different devices and services. Devices running the software stay synchronized with online services and can integrate multiple providers of e-mail and online calendars, for instance.

To use all the features, though, users will need both a TouchPad and a WebOS phone.

For instance, the demonstrations Wednesday showed how messages coming into a Pre phone can be answered on a tablet. Web pages being browsed on the tablet -- such as a restaurant's website -- can be shifted to a Pre phone by tapping the phone against the tablet.

Todd Bradley, HP's executive vice president for personal systems, said the company is bringing memorable new experiences comparable to the first time he heard the whisper of an electric car.

"We should all witness these firsts as often as we can in our lives. If you think about it, creating those experiences for a living is what the technology industry is all about."

The phones and tablet had been expected, but Bradley added something extra when he announced the company also plans to extend WebOS to desktop and laptop PCs.

Executives provided no details of when WebOS PCs will arrive and said the company will continue to produce Windows-based PCs also.

Microsoft declined to make executives available to discuss HP's move but a spokesman provided a statement: "HP is a valued Microsoft partner, and we continue to work closely with them on many new products that bring great experiences to our mutual customers."

In January, Microsoft disclosed the next version of Windows will run on the tiny, integrated hardware platforms used in smartphones and the latest tablet computers, including the Qualcomm hardware HP is using for its WebOS devices.

But the new version of Windows may not arrive until late this year or in 2012.

HP looked into different operating systems when it began developing slate-type tablet computers five years ago, according to Chief Technology Officer Phil McKinney.

It decided the best approach was an operating system designed from the ground up for mobile devices and one that could be tailored for tablets.

"There are operating systems appropriate for the job," McKinney said.

That approach is similar to that of Apple, which develops its own hardware and software, and has led the emergence of mobile computing devices since its iPhone was first released in 2007.

HP also may have decided it was simply cheaper to develop its own operating system and developer platform, instead of paying to license the multipurpose Windows.

It's a challenge to lure developers to a new platform, especially when they're already stretched developing applications for multiple platforms and devices, but HP has already landed a few big ones.

Time Inc. showed TouchPad versions of "Sports Illustrated" and "People" magazines that are expected to be ready -- along with Fortune magazine -- when the device launches.

HP also worked with Amazon.com on a TouchPad version of Kindle that supports the Kindle's new "collections" feature for managing libraries of Kindle books.

(This is an expanded version of my blogging live from HP's event)

SAN FRANCISCO -- Hewlett-Packard on Wednesday outlined a billion-dollar bet to reshape its huge personal-computer and mobile-device business to be more like Apple, using an in-house operating system rather than Microsoft Windows.

It's a blow for Microsoft to have its largest customer -- and the world's largest PC maker -- reject Windows for its new push into the fast-growing mobile-device business.

But shoppers may benefit from the increased competition and new options coming later this year.

HP plans to release two phones this spring and a tablet computer in the summer, all based on the latest version of the WebOS software the company acquired when it bought Palm last April for $1.2 billion.

HP's tablet -- the TouchPad -- joins a flood of tablet computers to be released this year, including new versions of Apple's iPad, devices running Google's Android software and Windows-based tablets from Dell and other major PC makers.

Research firms forecast more than 50 million tablet computing devices will be sold this year. Gartner expects 64.8 million will be sold globally, rising to 154 million in 2013.

"These things are proof that the future is really wide open when it comes to growth and opportunities in the mobile space," Qualcomm Chief Executive Paul Jacobs said during the HP event.

The TouchPad was the highlight of a splashy media event in a waterfront pavilion Wednesday morning.

Yet HP made clear it was launching more than a few devices. It was presenting a new platform it expects to rival Windows, Android and Apple's iOS software used in the iPhone and iPad.

The company aims to build the largest community of connected devices in the world, creating a big draw for software developers, according to Steven McArthur, senior vice president for applications and services.

"Virtually no other company could credibly put forward such a goal," said McArthur, a former president of Expedia.

HP emphasized that the WebOS platform can be pushed through its vast network of customers, partner companies and retail outlets. The Palo Alto, Calif., company has more than a billion customers and distributes its products through 88,000 stores around the world.

It's going to count on wireless phone companies to help move the TouchPad, though. Verizon and others will start selling the device in summer for a price somewhere below $800.

The 1.6-pound TouchPad has a 9.6-inch diagonal display with 1,024 by 728 resolution and a front-facing camera for videoconferencing. It's powered by Qualcomm's newest dual-core, 1.2 gigahertz Snapdragon processor and will come with 16 or 32 gigabytes of storage.

It will be available first with Wi-Fi and later with 3G wireless service through multiple carriers.

The new phones include the tiny Veer, about the size of a credit card with a 2.6-inch screen. It has 8 gigabytes of storage, a slide-out keyboard, HSPA+ wireless and an 800 megahertz Snapdragon processor. It will go on sale in "early spring."

"Never before has a smartphone done so much and felt so little," said Jon Rubinstein, the former CEO of Palm and now an HP senior vice president.

Rubinstein also showed the Pre3, a larger phone with a 3.6-inch diagonal screen, slide-out keyboard and HSPA+ and EVDO rev. It runs on a 1.4 gigahertz Snapdragon processor and will be available this summer.

Rubinstein said that with WebOS, the company aims to transform how people think, feel and connect to different devices and services. Devices running the software stay synchronized with online services and can integrate multiple providers of e-mail and online calendars, for instance.

To use all the features, though, users will need both a TouchPad and a WebOS phone.

For instance, the demonstrations Wednesday showed how messages coming into a Pre phone can be answered on a tablet. Web pages being browsed on the tablet -- such as a restaurant's website -- can be shifted to a Pre phone by tapping the phone against the tablet.

Todd Bradley, HP's executive vice president for personal systems, said the company is bringing memorable new experiences comparable to the first time he heard the whisper of an electric car.

"We should all witness these firsts as often as we can in our lives. If you think about it, creating those experiences for a living is what the technology industry is all about."

The phones and tablet had been expected, but Bradley added something extra when he announced the company also plans to extend WebOS to desktop and laptop PCs.

Executives provided no details of when WebOS PCs will arrive and said the company will continue to produce Windows-based PCs also.

Microsoft declined to make executives available to discuss HP's move but a spokesman provided a statement: "HP is a valued Microsoft partner, and we continue to work closely with them on many new products that bring great experiences to our mutual customers."

In January, Microsoft disclosed the next version of Windows will run on the tiny, integrated hardware platforms used in smartphones and the latest tablet computers, including the Qualcomm hardware HP is using for its WebOS devices.

But the new version of Windows may not arrive until late this year or in 2012.

HP looked into different operating systems when it began developing slate-type tablet computers five years ago, according to Chief Technology Officer Phil McKinney.

It decided the best approach was an operating system designed from the ground up for mobile devices and one that could be tailored for tablets.

"There are operating systems appropriate for the job," McKinney said.

That approach is similar to that of Apple, which develops its own hardware and software, and has led the emergence of mobile computing devices since its iPhone was first released in 2007.

HP also may have decided it was simply cheaper to develop its own operating system and developer platform, instead of paying to license the multipurpose Windows.

It's a challenge to lure developers to a new platform, especially when they're already stretched developing applications for multiple platforms and devices, but HP has already landed a few big ones.

Time Inc. showed TouchPad versions of "Sports Illustrated" and "People" magazines that are expected to be ready -- along with Fortune magazine -- when the device launches.

HP also worked with Amazon.com on a TouchPad version of Kindle that supports the Kindle's new "collections" feature for managing libraries of Kindle books.

(This is an expanded version of my blogging live from HP's event)

SAN FRANCISCO -- Hewlett-Packard on Wednesday outlined a billion-dollar bet to reshape its huge personal-computer and mobile-device business to be more like Apple, using an in-house operating system rather than Microsoft Windows.

It's a blow for Microsoft to have its largest customer -- and the world's largest PC maker -- reject Windows for its new push into the fast-growing mobile-device business.

But shoppers may benefit from the increased competition and new options coming later this year.

HP plans to release two phones this spring and a tablet computer in the summer, all based on the latest version of the WebOS software the company acquired when it bought Palm last April for $1.2 billion.

HP's tablet -- the TouchPad -- joins a flood of tablet computers to be released this year, including new versions of Apple's iPad, devices running Google's Android software and Windows-based tablets from Dell and other major PC makers.

Research firms forecast more than 50 million tablet computing devices will be sold this year. Gartner expects 64.8 million will be sold globally, rising to 154 million in 2013.

"These things are proof that the future is really wide open when it comes to growth and opportunities in the mobile space," Qualcomm Chief Executive Paul Jacobs said during the HP event.

The TouchPad was the highlight of a splashy media event in a waterfront pavilion Wednesday morning.

Yet HP made clear it was launching more than a few devices. It was presenting a new platform it expects to rival Windows, Android and Apple's iOS software used in the iPhone and iPad.

The company aims to build the largest community of connected devices in the world, creating a big draw for software developers, according to Steven McArthur, senior vice president for applications and services.

"Virtually no other company could credibly put forward such a goal," said McArthur, a former president of Expedia.

HP emphasized that the WebOS platform can be pushed through its vast network of customers, partner companies and retail outlets. The Palo Alto, Calif., company has more than a billion customers and distributes its products through 88,000 stores around the world.

It's going to count on wireless phone companies to help move the TouchPad, though. Verizon and others will start selling the device in summer for a price somewhere below $800.

The 1.6-pound TouchPad has a 9.6-inch diagonal display with 1,024 by 728 resolution and a front-facing camera for videoconferencing. It's powered by Qualcomm's newest dual-core, 1.2 gigahertz Snapdragon processor and will come with 16 or 32 gigabytes of storage.

It will be available first with Wi-Fi and later with 3G wireless service through multiple carriers.

The new phones include the tiny Veer, about the size of a credit card with a 2.6-inch screen. It has 8 gigabytes of storage, a slide-out keyboard, HSPA+ wireless and an 800 megahertz Snapdragon processor. It will go on sale in "early spring."

"Never before has a smartphone done so much and felt so little," said Jon Rubinstein, the former CEO of Palm and now an HP senior vice president.

Rubinstein also showed the Pre3, a larger phone with a 3.6-inch diagonal screen, slide-out keyboard and HSPA+ and EVDO rev. It runs on a 1.4 gigahertz Snapdragon processor and will be available this summer.

Rubinstein said that with WebOS, the company aims to transform how people think, feel and connect to different devices and services. Devices running the software stay synchronized with online services and can integrate multiple providers of e-mail and online calendars, for instance.

To use all the features, though, users will need both a TouchPad and a WebOS phone.

For instance, the demonstrations Wednesday showed how messages coming into a Pre phone can be answered on a tablet. Web pages being browsed on the tablet -- such as a restaurant's website -- can be shifted to a Pre phone by tapping the phone against the tablet.

Todd Bradley, HP's executive vice president for personal systems, said the company is bringing memorable new experiences comparable to the first time he heard the whisper of an electric car.

"We should all witness these firsts as often as we can in our lives. If you think about it, creating those experiences for a living is what the technology industry is all about."

The phones and tablet had been expected, but Bradley added something extra when he announced the company also plans to extend WebOS to desktop and laptop PCs.

Executives provided no details of when WebOS PCs will arrive and said the company will continue to produce Windows-based PCs also.

Microsoft declined to make executives available to discuss HP's move but a spokesman provided a statement: "HP is a valued Microsoft partner, and we continue to work closely with them on many new products that bring great experiences to our mutual customers."

In January, Microsoft disclosed the next version of Windows will run on the tiny, integrated hardware platforms used in smartphones and the latest tablet computers, including the Qualcomm hardware HP is using for its WebOS devices.

But the new version of Windows may not arrive until late this year or in 2012.

HP looked into different operating systems when it began developing slate-type tablet computers five years ago, according to Chief Technology Officer Phil McKinney.

It decided the best approach was an operating system designed from the ground up for mobile devices and one that could be tailored for tablets.

"There are operating systems appropriate for the job," McKinney said.

That approach is similar to that of Apple, which develops its own hardware and software, and has led the emergence of mobile computing devices since its iPhone was first released in 2007.

HP also may have decided it was simply cheaper to develop its own operating system and developer platform, instead of paying to license the multipurpose Windows.

It's a challenge to lure developers to a new platform, especially when they're already stretched developing applications for multiple platforms and devices, but HP has already landed a few big ones.

Time Inc. showed TouchPad versions of "Sports Illustrated" and "People" magazines that are expected to be ready -- along with Fortune magazine -- when the device launches.

HP also worked with Amazon.com on a TouchPad version of Kindle that supports the Kindle's new "collections" feature for managing libraries of Kindle books.

(This is an expanded version of my blogging live from HP's event)

Curious timing: Goldman Sachs issues another report saying the iPad and tablets are hammering Microsoft, then anonymous sources tell the New York Times that Windows 7 tablets are part of Steve Ballmer's CES keynote.

The Times piece says Ballmer will show Dell and Samsung tablets running Windows 7 and may even give a peek at a device running Windows 8.

A Microsoft spokesman declined to comment, saying "we are not talking at all about CES."

Ballmer already said these devices are coming. He told analysts in July that Microsoft's big push into tablets will come in early 2011 with the release of new Intel hardware for mobile devices.

One of the analysts he was talking to was Goldman's Sarah Friar, who is unlikely to be convinced by a whispery blog entry saying "wait until January!"

Still unanswered are key questions about the next generation of Windows tablets: When exactly will they go on sale, and how much will they cost?

If they're $1,000, they'll die the same quick death as Microsoft's ultra-mobile PC concept, which debuted on Samsung hardware in 2006. The device Ballmer will show in January is "similar in size and shape to the Apple iPad, although it is not as thin," according to "people familiar with the device" who spoke to the NYT.

An appearance at CES doesn't mean the devices will go on sale in January. The show is really for retailers to see products that they'll carry later in 2011.

Hewlett-Packard, for instance, waited until late October to finally, and quietly, take orders for the Win7 Slate PC that Ballmer showed last January. HP was a special case, though, as it's trying to build consumer tablets on its own operating system now.

I'm curious to see whether the "Windows 7" operating system on the tablets will be the full-blown version or stripped-down versions designed for consumer-electronics and portable devices.

Today's column is an extended take on Google's CR-48 preview of its Chrome operating system:

It was thrilling to fire up Google's ultra groovy CR-48 laptop running the company's new Chrome operating system.

The Applesque machine was like an early Christmas present from Silicon Valley Santa. Inside the eco-friendly cardboard package was technology that promised to finally topple Microsoft's 30-year dominance of the PC business.

Who could wait to see what kind of new computer the hottest software company in the world can create with its $3 billion-a-year research budget?

But after spending a few days with the CR-48, I don't think Microsoft has much to worry about yet. If anything, Chrome is more likely to challenge Apple's iOS software used in the iPad.

Chrome OS is elegantly designed with clever features that make it simple to run. But the software is crippled by Google's ambitious business objectives and quixotic pursuit of "online only" computing.
It's not really a personal-computer operating system, like Windows or Apple's OS X. It's more of an embedded system - like the software inside a cable box or phone - that's locked into place, mostly out of reach to users and managed remotely by Google.

What the user sees is just a browser - a version of Google's Chrome browser - with enough software under the hood to make the computer work. As a result the software is fast to start but limited. The user hardly has any control or choice over how to use and manage the computer on which it's running.

Chrome is designed to be always connected to the Web, through Wi-Fi or Verizon 3G Wireless service.

The CR-48 that Google's distributing to developers, testers and the media is a gorgeous laptop but, unfortunately, it's not for sale. It's only a test bed for demonstrating, testing and marketing the Chrome OS, which is to start appearing on computers sold by Acer, Samsung and others next year.

I'm expecting to see a bunch of different Chrome systems shown in January at the Consumer Electronics Show aimed for stores later in 2011. There will probably be a mix of laptops, tablets similar to the iPad and maybe even "all-in-one" systems with a monitor and processor in the same unit.

They'll probably cost about the same or less than low-end Windows PCs.

They should be cheaper, since the systems require you to use Google's ad-supported services. Buyers probably will also end up buying Verizon Wireless service.

Google and Verizon are offering 100 megabytes of free data transmission per month for two years to Chrome users. After that you'll have to pay either $10 per day for unlimited service or sign up for monthly plans that start at $20 for 1 gigabyte of data. (Verizon provides information on how much data various tasks will use; an excerpt below)

The 100 megabytes lasted less than a day. It wasn't enough to watch a single episode of "The Office" on Hulu.com, stuttering and buffering on the 3G service at my house. Partway through, the system showed an error message, blaming the website. It said the site "may be temporarily down or it may have moved permanently to a new Web address." Hulu was still up; the problem was that I needed to start paying Verizon or get on a Wi-Fi network.

Google is taking another stab at the "network computer" that Oracle, Sun Microsystems and others proposed in the 1990s.

The concept is to offer cheap and simple computers that connect to a network where the heavy-duty computing is handled and centrally managed. The PC becomes a simple terminal.

This approach minimizes the importance of the PC and puts the emphasis on the data center.

You've probably used a similar system at libraries, which provide terminals to search and browse the catalog.

Having a browser-only computer is fine for a lot of things we do with computers. You can write and save documents at sites like Google Docs or Office Web Apps, if they're designed to work with Chrome. I was able to edit an Office document with the CR-48 but couldn't stream anything from Netflix, which uses software that's not supported by Chrome.

Last week's "launch" of Chrome was really aimed at Web developers. Google wants them to write special versions of their Web pages for Chrome. Those pages are characterized as applications and distributed through a polished Chrome app store offering free and paid apps. When you "install" one of these pages, they are bookmarked on your Chrome start page, with phonelike icons that you click to open the pages.

But this approach really works only if you're constantly connected to the Web. It also shifts control of the system from the user to the system manager and site operators.

Some people will be uncomfortable using computers that basically require you to log in to Google and store files on its servers.

For all of Google's talk about open software and net neutrality, Chrome OS is pushing computing back toward a model where you've got to sign in and use a big, nosy company's mainframe.

It's also unclear whether Google is willing to invest the massive effort it takes to build and support a true PC operating system. For instance, one of the hardest things about building an OS is making sure it works with different devices people use with their computers.

I connected the CR-48 to a three-year-old printer in my house and was presented with a "white screen of death" - a blank box that froze the browser. I should have read the online help pages first; Chrome OS doesn't have any printer drivers whatsoever.

To print something, you've got to send the file to a Google server, which in turn will send the file to a Windows PC (not a Mac) that's connected to a printer. But first you've got to sync your Windows PC with Google's online print service and be sure that it's logged in to your Google account.

Google may think this is a clever way to piggyback on the work Microsoft's done to support all the different printers people use, at least until all printers connect to the Web. Chrome OS users are going to think it's a royal pain and the software just doesn't work right.

More competition in the operating-system business is good and Chrome is an intriguing entry. But it has a long way to go before it's a contender for your next PC.

Note: For a different perspective, here is a post by Google Chief Executive Eric Schmidt about the CR-48 launch and Chrome OS, relating his work on an early Sun network computer and "going back to old ideas."

Microsoft has been briefing partners on Windows 8 -- surprise, surprise -- and someone leaked documents to an Italian enthusiast site.

Among the nuggets disclosed is a slide talking about the emphasis on hardware, scoping out potential Windows 8 touchscreen machines with at least five points of contact on screens ranging from 17 to 30 inches.

It also suggests Kinect-like features will be supported by the new OS coming in a few years, including facial recognition systems to identify users and infrared proximity sensors to wake a PC when someone approaches. The sensor would also put the system to sleep when the user leaves the area.

The documents say that tablet-like slate PCs will be a "center of gravity" form factor that will be targeted with Windows 8, along with laptops and all-in-one PCs.

Here's one of the slides via MSFTKitchen.com: