By Alfred Hermida BBC News Online technology staff in Las Vegas

In the future we might all be wearing watches that can tell us the latest news and weather, as well as the time, if the vision of Bill Gates comes true.

In a keynote speech on the eve of the world's largest consumer electronics show, the Microsoft chairman demonstrated for the first time smart gadgets using what he called Smart Personal Object Technology, or Spot.

"Spot is going to make everyday devices more intelligent," he told attendees of the Consumer Electronics Show in Las Vegas.

The first of the gadgets is going to be a smart watch, offering news, weather and traffic reports and other information on the go.

Three well-known watch manufacturers, Citizen, Fossil and Suunto, have already signed up to produce the smart watches, which should be in shops in the US by the autumn.

Mr Gates also revealed a new gadget, a portable multimedia player called Media2Go being developed with Intel.

It will have a 4-inch screen and hard drive to store photos, video or music.

'Digital decade'

The notion of smart devices is key to Microsoft's future strategy. Throughout his keynote address, Mr Gates emphasised the idea of smart living.

By this he meant having different products like computers, monitors and even sewing machines, all connected to the internet and able to talk to each other.

We will see wi-fi networks in every digital home and in the workplace. Bill Gates, Microsoft chairman

"By the end of this decade, we will be doing everything using different devices," he said, "working together with synergy to realise the potential of the digital decade."

Microsoft sees this as a way of having access to the power of the home computer, without having to physically be in the room where the machine is.

Its Smart Display technology already allows people to take their computer screen with them, anywhere in the home.

"With these wireless touch screen monitors you can take the PC experience to anywhere in the house," said Mr Gates.

No ties

The Microsoft chairman highlighted the appeal of wireless technology which does away with messy computer cables, in particular of wi-fi.

The watch will go beyond time to provide timely information Bill Gates, Microsoft chairman

"We expect wi-fi to be pervasive," he said. "We will see wi-fi networks in every digital home and in the workplace."

The Spot software does not use wi-fi but instead rides on the back of FM radio signals.

A smart watch would be listening for a signal and be able to receive information like share prices or traffic reports.

You can customise the selection of services on web and every watch has unique key so that only that gadget will receive your information.

Smart fridge magnets

"The watch will go beyond time to provide timely information," said Mr Gates.

"The connected nature of these watches is a sea change of how we think about what we can glance at."

"The idea of smartness is just the beginning," he said.

In the coming years, Microsoft foresees smart objects like takeaway menus that change the daily specials or fridge magnets that serve as digital picture receivers, all powered by its software.