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BILL GATES SAYS HARDWARE WILL BE ALMOST FREE IN A DECADE

Hardware costs will fall sharply within a decade to the point where widespread computing with speech and handwriting won't be limited by expensive technology, Microsoft Corp. Chairman Bill Gates said on Monday.

"Ten years out, in terms of actual hardware costs you can almost think of hardware as being free -- I'm not saying it will be absolutely free -- but in terms of the power of the servers, the power of the network will not be a limiting factor," Gates said, referring to networked computers and advances in the speed of the Internet.

Microsoft has often been at odds with the computer hardware industry over the last 20 years, given the dominant position it holds through the lock on PCs it has through its Windows operating system.

The world's largest software maker is betting that advances in hardware and computing will make it possible for computers to interact with people via speech and that computers which can recognize handwriting will become as ubiquitous as Microsoft's Windows operating system, which runs on more than 90 percent of the world's personal computers.

"Many of the holy grails of computing that have been worked on over the last 30 years will be solved within this 10-year period, with speech being in every device and having a device that's like a tablet that you just carry around," Gates said at the Gartner Symposium ITxpo, held by information technology researcher Gartner Group.

In fact, Microsoft is already selling software for such products, aimed mainly at businesses, rather than retail consumers. Last week Microsoft launched Speech Server for companies developing automated call centers.

Gates also said advances in programing will allow software developers to create applications in less time by using visual representations of the inner workings of software rather than writing lines of programing code.

Redmond, Washington-based Microsoft is planning to spend $6.8 billion on research and development in its current business year to June, which Gates said will deliver many advancements in speech and other technology for Microsoft.

SECURITY STILL TOP PRIORITY

Gates reiterated his mantra that improving the security and reliability of software was still the company's top priority.

Two years ago, Gates announced in a company-wide memo that he would make trustworthy computing Microsoft's top priority, saying that viruses, hacker attacks and faulty software would become a drag on the company's business and on the industry.

Spending on research and development is producing results in software security, Gates said.

Gates, who said earlier this year that Microsoft would be able to contain the spread of unsolicited e-mail by 2006, said progress was on track.

"I think within the next two years it'll get off the top five list," Gates said.

In terms of security, Gates highlighted this year's release of an update to Windows XP, called Windows XP Service Pack 2, designed to enhance the security of the PC operating system.

While Microsoft is making incremental improvements to its current operating system, it is betting that its next version of Windows, code-named Longhorn, will deliver advancements that make computing and information exchange seamless activities.

Longhorn's shipping date has been a topic of wide speculation, given that it will most likely come five years after the release of Windows XP in 2001.

"People are speculating that we're out in '06 sometime -- that's probably valid speculation -- but it's not a date-driven release," Gates said.