LAS VEGAS - The first Smart Personal Objects Technology (SPOT) gadgets, which could hit the market as early as this fall, epitomize the convergence that Microsoft sees happening in devices, connectivity and services.

So said Microsoft Chairman Bill Gates in his kick-off keynote address at the Consumer Electronics 2003 show here this evening.

While Gates touted a handful of new consumer platforms that Microsoft is building with a variety of partners - including its Windows Powered Smart Displays, Windows Media Center PCs and Xboxes -- he focused most heavily on the next-generation SPOT devices, which he first discussed at Comdex Fall last year.

"We think SPOT represents the directions that things are going in," Gates said. It provides a "natural form factor" that provides "things people care about," he added.

At Wednesday night's keynote, Gates highlighted a forthcoming generation of SPOT watches that Microsoft is building with watch-makers Fossil, Suunto and Citizen. Microsoft will begin test marketing the first SPOT watches this month, Gates said, with commercial availability projected by Fall 2003.

At Fall Comdex, Microsoft discussed the brand-new, real-time microkernel operating system that its research division has been building during the last three years to power SPOT devices - which will include everything from smart magnets and key chains, to smart alarm clocks. National Semiconductor Corp. is providing the chipset that will be at the heart of SPOT devices.

Gates showed how SPOT watches, with digital screens of 120 by 90 pixel resolutions, can be customized to display a wide variety of personalized information.

"SPOT is about glanceable information," Gates told keynote attendees. It represents "a sea change for what we can glance at."

Microsoft will provide software that will allow users to select from a menu of displayable information , such as stock prices, weather feeds and sports scores. By pushing a button on the SPOT watch, users will be able to change the channels they can view at any given time.

Microsoft will provide SPOT watch customers with unique keys to maintain the security of their personally encrypted information, Gates said

The watches will be able to receive information over DirectBand, a one-way FM radio network. Among the communications providers working with Microsoft to provide DirectBand are ClearChannel, Rogers, Gilat, Spacenet, Entercom and Greater Media.

"The FM infrastructure is already there," Gates said. As a result, anywhere a customer can get FM radio, the watch can receive the live data feeds.

Another new form factor that Gates showed off during his keynote is a portable media player, code-named "Media 2Go." Microsoft is working with Sanyo, ViewSonic, Samsun, Sanyo and iRiver to build the new consumer players. The players will allow consumers to store hours of music and video, as well as digital photos.

Gates said all of these Media2Go partners are committing to target the 2003 holiday season to launch their systems.

Gates talked up the increasingly important role of services in the consumer space. He said to expect both Microsoft and its partners to deliver broad services (like MSN 8 and Xbox Live), as well as more niche services, such as printing services, like the one Microsoft recently launched with Kinko's, or even more tailored hobbyist services.

Gates described these kinds of services as "the infrastructure required to develop the kind of things promised three to four years ago"