Table: Bill Gates's Innovation Factory

Critics say Microsoft (MSFT ) doesn't come up with innovations that change the face of computing. Still, its engineers have hatched scores of modest advances that are in nearly every new Microsoft product. Moreover, promising projects are in the pipeline:


Long a favorite of Gates, the first tablet PCs will hit the market next year. Microsoft has signed up five companies to make laptops with a screen to scribble on. While the handwriting recognition is still imperfect, Microsoft believes that buyers will use the devices to store handwritten notes.


The idea is to communicate with a computer the way you talk to a person. Already, users can retrieve info from Microsoft's SQL Server database software by typing in simple questions. The next version of Windows, due out two years ago, will use even more natural-language technology.


Researchers are cooking up a way to use a digital camera to scan a PC user's head into a 3D image. Software then adds a full range of emotions. The point? Microsoft thinks that gamers will want to use their own images in role-playing games.


Researchers are creating software agents that help you sort through the deluge of electronic information. One day, an agent will study what types of messages you read first and know your schedule. Then it will sort e-mail and voice mail, interrupting you with only key messages.

    Before it's here, it's on the Bloomberg Terminal.