In the future, Robbie Bach, president of Microsoft's Entertainment and Devices division that makes products like the Xbox 360 gaming console and Zune portable media player, will take a central role in delivering the address.

Speech and Touch

In a presentation sprinkled with self-deprecating jokes and a finale featuring rock guitarist Slash, Gates predicted that people would interact more naturally with technology through methods like speech and touch over the next decade. It is a prediction Gates has made for years, touting devices like the tablet computer, which have had slow adoption.

However, devices like Apple iPhone and Nintendo Wii motion-sensing video game machine are proving that more "natural" user interfaces have a broad appeal with consumers.

"All of those are just starting to show you that natural interaction pattern really breaks you out of the keyboard and mouse," Gates said in an interview with Reuters. "The next big surprise for people will be how this natural interface becomes pervasive."

Last year at CES, Microsoft unveiled the Sync car audio and mobile phone system for cars offered by Ford. Sync recognizes voice commands to play music and make phone calls.

Gates also displayed the company's Surface computer, a coffee table shaped PC that works like a large touch-screen PC and can respond to objects placed on top of it.

The company also unveiled a set of partnerships with media companies including a deal with General Electric's NBC Universal to power its Web site for the 2008 Summer Olympics.

Using Microsoft's Silverlight Web video technology, a rival to Adobe System Inc's Flash video technology, the Web site "NBCOlympics.com on MSN" will offer more than 3,000 hours of live and on-demand sports coverage.

Microsoft also said it struck a deal with Walt Disney Co to bring ABC and Disney Channel shows to Xbox Live Marketplace, the online video game and entertainment store tethered to its Xbox 360.

It also said MGM Studios will be bringing its library of movies including titles like "Rocky," "Terminator" and "Legally Blonde" to Xbox Live, a service that now had more than 10 million users, a milestone reached six months ahead of plan.

(For an edited transcript of our interview with Gates, please go to blogs.reuters.com/mediafile/)