Microsoft unveils tabletop 'Milan' computer

Its next-generation computer uses wireless autosync and touch-screen technology

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Harrah's is developing custom applications for about 50 Milan units it ordered and expects to have as many of these in production as possible by year's end, said Tim Stanley, Harrah's CIO. This implementation is typical of customers' initial approach for Milan: Microsoft provides the computers' guts -- including the operating system and some basic applications for photos, music and the like -- and a software development kit, and customers build their own applications, Stanley said.

Stanley, a former Microsoft employee, saw an early Milan version 18 months ago and was intrigued by it. Although Harrah's is not a Microsoft shop, he thought Milan would provide a "platform to do some new and innovative things for our customers."

Harrah's is developing a mapping program for Milan that links to its Total Rewards customer VIP program, Stanley said. At VIP lounges, members will be able to place their Total Rewards cards on the screen and will be identified by the kiosk. They will be able to browse through interactive maps that show amenities, entertainment and restaurants from Harrah's eight properties in Las Vegas -- where Harrah's will first launch Milan -- and order tickets or make restaurant reservations on the kiosk.

Harrah's also is working on other applications, including one that will let customers in VIP areas of locations such as Pure Nightclub at Harrah's property Caesar's Palace, order beverages or send beverages to other patrons, Stanley said.

T-Mobile plans to deploy Milan kiosks to provide customer service in 1,200 of its retail stores, said Jeffrey Gattis, director of product management at Microsoft's Surface Computing group. Customers can take the handset model they want off the shelf, place it on Milan and use the touch screen to configure the services and applications they want. They can then take that model to a customer service agent, he said.

Microsoft said it will release a software development kit for third-party developers once the computers catch on in the market. And while the company initially plans to offer the Milan hardware, manufactured by a third-party contractor, Microsoft said it might let hardware manufacturers build and brand Milan computers in the future.

That move will be necessary for Milan's long-term success, said Matt Rosoff, an analyst at Directions on Microsoft Inc. "To turn it into a real business, they have to take a very Microsoft approach and [resell] the hardware out," he said.

It will be some time before consumers will want to put the rather bulky prototype Microsoft is demonstrating in their living rooms, though this is where Microsoft is going with Milan, said David Dauod, an analyst at research firm IDC.

"Ultimately, Microsoft's goal is to see the product become something like what used to be a plasma TV," Dauod said. "As awareness grows and prices go down, [it will be more ubiquitous]. Ultimately, mainstream will become something you will see in the mid to long term."

Microsoft said Milan's price will be between $5,000 to $10,000 per unit, which is too expensive for consumers, he said. Microsoft hasn't disclosed its manufacturing costs, but Dauod said Microsoft probably does not expect a profit from Milan in the near future.

More importantly, however, the product shows real innovation from Microsoft for the consumer market, the first the company has shown in a long time, he said. Both the Xbox and Zune were "me-too" products that entered competitive markets. Milan raises the bar for other consumer electronics vendors, Dauod said.

"I've regained confidence in Microsoft with this product," he said. "It's showing a different side of Microsoft, which is cool."

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Copyright © 2007 IDG Communications, Inc.

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