When Bill Gates was asked to forecast the digital future, he took to the stage at an industry event in Las Vegas and unveiled a Microsoft tablet. He was already using one as his everyday computer, he said, and predicted that within five years it would be "the most popular form of PC sold in America".
But that was in November 2001, and the stylus-operated Tablet PC launched a year later sank without a trace. This week, with the consumer release of Windows 8 and its matching Surface tablet, Microsoft is trying again.
To highlight its biggest new product since Windows 95, Microsoft is mobilising the kind of advertising budget rarely seen outside US presidential election campaigns, estimated at up to $1.8bn. Sales of PCs are declining, meaning the world's largest software company badly needs a popular vote for its move into mobile devices.
"The future of personal computing is moving definitively away from PCs towards smartphones and tablets, and while Microsoft is extremely strong in PCs it has no meaningful presence in mobile devices," says digital forecaster Benedict Evans at Enders Analysis.
These smaller, more portable computers can take photos, edit and share them. They can play music, or TV shows, display books and newspapers, search the internet, and offer faster, more sofa-friendly ways of emailing friends, online shopping and checking Facebook updates.
"The number of people who can do all or most of what they want to do on a tablet or a smartphone is growing," warns Evans. "That feeds into people using PCs less and spending less money on them."
There are around 1.3bn PCs running Windows software around the world, more than the 1bn smartphones Strategy Analytics estimates are in use today. Microsoft controls 95% of the PC market, but that market has shrunk 8% since last year globally, and by an even steeper 14% in the US, which sets the trend.
It is a trend that is denting the business models of much younger companies than Microsoft. Internet-age giants like Google and Facebook are feeling the impact too. Facebook's users are moving from the desktop to the smartphone, while its advertisers have been slower to make the transition.
Apps on phones and tablets bypass search engines to provide a more direct link to internet content, which has translated into a decline in the average price paid by advertisers for each click from a Google user. It was this, as much as a clerical error that saw Google's financial results published three hours ahead of schedule, that sent the company's share price into freefall last Thursday.
Google saw this trend coming years ago, and its response was Android – free phone software for handset makers to use, to give it a presence in mobile as well as on desktops. What has changed is that the flow of traffic onto mobile is finally beginning to show up in Google's numbers. As it invests to adapt, for example by buying loss-making handset maker Motorola, profits are being squeezed.
"While the search cash cow continues to pay, the costs of shifting the revenue mix are depressing the income," says professor Ajay Bhalla at Cass Business School. "The results indicate that Google executives are trying to avoid the mistakes made by Microsoft as it became increasingly reliant on a handful of products."
Despite Gates's enthusiasm, Microsoft has been slower to respond to the shift to mobile and is nowhere in tablets. Windows Phone software was brought up to date two years ago, with distinctive live tiles to represent apps instead of static icons. It has been well received by the few who have used it.
But the work of making Windows Phone software famous has been left to handset manufacturers, mainly Taiwan's HTC and Finland's Nokia, which has so far sucked up $1bn in marketing support from Microsoft, to little avail. Windows Phone has a mere 3% market share.
This has not stopped Microsoft using Windows Phone as the design inspiration for its new PC software, which will run in almost identical form on tablet computers, and was really created with the touch screen in mind.
The tablet version is so crucial to Microsoft that the firm has decided showcasing it cannot be trusted to outsiders, and will make Surface in-house.
But the tablet may be more of a display model than a profit generator. Microsoft may not intend to sell that many. At £479, including the keyboard that also doubles as a cover, it does not come cheap.
In the UK, it will only be available via Microsoft's website, so no Dixons or John Lewis displays. Trendforce predicts shipments of only 2.5m in 2012, compared with 84m iPads sold since 2010.
Whatever its ambitions, the move back into hardware is a brave one for Microsoft, whose occasional attempts to fuse computing brains and brawn have ended in more misses than hits. For every Xbox games console, there is an unsold Zune music player.
The company is taking an even bigger risk with Windows 8. Those who have used it say it works well on the touch screen, but is more awkward to navigate with a mouse and keyboard. The start button has disappeared, and the functions it used to house, like word processing or search, are now hidden at the sides of the screen. They are only revealed when the mouse hovers over them.
Rather than bringing its phone software to tablets and leaving PCs alone, as Apple has done, Microsoft wants a common interface for all three screens in the hope that its millions of PC customers will follow it onto other devices. The move should make life easier for apps developers too.
But there is a risk. "If consumers find Windows 8 not very appealing, both Microsoft and PC vendors could face further declines in PC sales as consumers spend their money on other devices," warns Gartner analyst Annette Jump.
If the launch is a success, Jump says we will start seeing Windows in new formats like touch-screen notebooks or so called "all in ones" – widescreen computers with built-in hard drives that maybe sit in the kitchen, displaying films, photos and recipes.
Those who remember Microsoft's 2002 tablet PC say it failed because the company expected it to be used for word processing and spreadsheets. By contrast the was marketed as a "kick back and relax" computer – the adverts showed users with their feet up.
Windows 8 will try to merge work and leisure. Even the tablets will come with the Office suite, so that live tiles showing a friend's social network updates will sit next to word documents.
While the strategy is seen as a sensible one, some believe it is already too late for Microsoft. Technology writer Stasys Bielinis of UnwiredView.com accuses the company of having clung to the PC, focusing on profits over users. "The users wised up, competition rose up, and we have broken the chains that bound us to Microsoft for the past 20 years," he says.
Windows 8 is not Microsoft's last hurrah. Unlike Nokia, which will run out of money in two years if it continues to burn cash at its current rate, the company which made Gates the richest man in the world is still highly profitable and has $66bn in the kitty. But with the PC in decline, it cannot afford to give up on mobile computing.
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