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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: stephan boileau who wrote (36058)	1/6/2000 12:22:00 AM
From: Ian Davidson	Respond to of 74651

Article from tomorrow's WSJ: January 6, 2000 Microsoft Plans a New Assault On Market for Non-PC Devices By DAVID P. HAMILTON Staff Reporter of THE WALL STREET JOURNAL Microsoft Corp., battered in previous attempts to extend its sway over the personal computer to home electronics and hand-held computers, is making a fresh assault. Over the next several months, the Redmond, Wash., software company plans a range of new initiatives aimed at securing a foothold in the nascent markets for non-PC computing devices that can be used to access the Internet, manage home-entertainment systems, and control the flow of information through the home and functions such as light and heating. Among the new products Microsoft plans is a new generation of hand-held computers that will allow users to more easily access the Internet and software aimed at managing digitized music and video entertainment. Microsoft Chairman Bill Gates was expected to demonstrate several such applications at a keynote address to the Consumer Electronics Show in Las Vegas last night. Microsoft has long had its eye on the market for non-PC devices, but so far hasn't made much headway. Its current operating system for handheld devices, Windows CE, has lagged behind in the handheld market compared with devices from 3Com Inc.'s Palm Computing Inc., although it has enjoyed better success in the market for TV set-top boxes. And in entirely new areas such as new Internet-access devices and "personal video recorders," which allow users to pause or rewind live television programs or store them on computer hard disks for later viewing, companies such as Intel Corp. and TiVo Inc. have opted to use the free Linux operating system instead of Microsoft software. Microsoft, however, is undaunted. "We learn and we're persistent," said Craig Mundie, a Microsoft senior vice president. "We're going to persist in this area of personal portable electronics." For instance, Microsoft plans to highlight methods for integrating personal-computer functions with home entertainment systems. Mr. Gates is expected to demonstrate how Microsoft software can be used to organize a digital-music collection and to distribute it for playing on both home and car stereo systems. Microsoft also will emphasize its ability to manage a variety of home-automation systems via Windows-based software. The company will even designate one of its employees as a "digital diva," a nontechnical person that will make public appearances and perform other chores to help allay consumer fears over the way such technology will work. In addition, Microsoft expects to release a new generation of hand-held devices, dubbed "Pocket PCs," that will showcase a variety of new functions such as an enhanced ability to send and receive electronic mail and to retrieve information from the Internet. Such Pocket PC devices will also be able to play digital music and video stored in Microsoft's Windows Media Player format, and will allow users to read electronic books. Some of devices are expected to be based on an updated version of Windows CE, code-named Rapier, though the company appears to be shifting its focus away from that name. Microsoft still faces an uphill battle on the home front. It needs to win wide support among consumer-electronics makers in order to take a leading role in integrating home entertainment, but many such manufacturers remain wary of the software company's ambitions. And rivals such as Sony Corp. and Sun Microsystems Inc. offer competing technologies for the home that could slow also set standards in the fragmented market. Mr. Mundie, however, argues that Microsoft's edge will lie in creating development tools and numerous applications that run on top of its software, making it far easier for manufacturers to quickly bring new interactive entertainment products to market. For instance, Microsoft plans to incorporate software for editing digital videos into its next consumer PC operating system. "At the end of the day, if people decide that this software is not that hard, they can hire a lot of people and roll their own," Mr. Mundie said. Some companies, he said, will see the value in Microsoft's offerings, but "some will never see it, and will always want to do their own." Write to David Hamilton at david.hamilton@wsj.com Ian