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By Carl Howe

Microsoft (MSFT) announced yesterday a new direct-manipulation concept and user interface targeted at the gaming and hospitality industries. The system uses projectors and cameras beneath a translucent flat surface to give user the appearance of seamlessly manipulating both real and virtual objects in the same environment. As an example, a user might put down a loyalty card for a casino, and have the system recommend restaurants and shows for the user to go based upon their prior preferences. In another demonstration application, a user put down a WiFi-enabled digital camera and was able to shuffle through and manipulate the pictures in it.

Make no mistake: multi-touch and direct manipulation interfaces like Milan (Microsoft's development code name for surface computing) are very cool. In fact, that's one of the reasons the consumer market is so excited about Apple's (AAPL) iPhone: it will be the first multi-touch direct manipulation device available to consumers. But as with many concept demos, the devil here is in the details, and Microsoft's surface computing initiative is very different from -- and probably will never compete with -- the technologies Apple is introducing in the iPhone.

Microsoft's technology:

1. Depends on cameras and projectors for its magic. This isn't a touch-screen technology, but an optical one. That has some huge advantages, like the ability to use brushes to paint, but also has some disadvantages, like the need for dim lighting to avoid washing out the screen and the need to put bar codes on objects for the system to recognize them.

2. Focuses on large interactions instead of small. Despite claims Microsoft has been shopping this technology to Windows Mobile phone makers, this technology is clearly designed to work primarily in large kiosk-like settings than mobile phones. You need large empty spaces for optical projectors and cameras -- that's why you can't hang projection TVs on your wall like you can a plasma or LCD display. There's no room in a mobile phone for the optics needed to implement this type of surface system there -- and using a multi-touch enabled touch-screen would undoubtedly run afoul of Apple's patents on that technology.

3. Doesn't fit in the PC ecosystem. Even if consumers were OK with the many-cubic-foot bulk of these surface systems, Microsoft says in its press release that it will distribute this technology largely through a distribution and development agreement with International Game Technology. That means you're much more likely to see this technology in your next video poker machine at the Venetian casino than you are in the PC you get from Best Buy.

So surface computing isn't the iPhone or a PC technology. Does that matter? After all, Apple isn't doing anything with multi-touch for computers, is it?

Well wait a few weeks and you may be surprised at how much Apple is doing with multi-touch. We've already seen small applications of multi-touch on Apple MacBooks and MacBook Pros, where two-finger scrolling has become the norm. But as we've noted before, multi-touch gestures combined with a new 3D finder have the potential to revolutionize the PC user interface -- and we believe that that interface will be part of Apple's next OS Leopard. And given that Apple has recently cut its display prices to reduce inventory and has several multi-touch gesture and flat touchscreen patents already filed, we may see touchscreen-supporting flat-panel displays and notebooks introduced along with Leopard too.

Our bet is that Steve Jobs won't spill the beans on Apple's multi-touch efforts at the D Conference today -- he'll just show off the iPhone and leave it at that. But make no mistake: Apple has similar technology in its development queue. But in Apple's case, we won't see it as a demo. It will come in actual products you can buy.


Full disclosure: the author owns Apple stock at the time of writing.

Source: How Apple Will Trump Microsoft's Surface Computing Initiative