MSN Direct Wants a Hit With SPOT

Coming this fall to a watch near you, perhaps on you: Microsoft’s new wireless information and messaging service that will run on evolving smart watch devices.

The software company’s MSN Direct division said the MSN Direct service, which costs $9.95 a month, is geared to deliver customized information to a new category of watches. The service is part of the company’s Smart Personal Objects Technology (SPOT) initiative, which could lead to a platform to deliver games, media and other content to future intelligent wireless gadgets.

MSN Direct said the service would provide consumers with information including news, weather, sports scores, stock quotes, movies, dining, and games. Microsoft is expected to leverage some of its original content and existing media licensing arrangements in order to provide the data for the wireless watch information service.

The wireless watches are expected to cost in the range of between $100-$300, and for subscribers not interested in the monthly pricing plan there is an option to pay $59 for a full year of MSN Direct service.

Charlene Li, principal analyst, Forrester Research, said she doesn’t expect the market for the devices and the attending service to extend beyond an affluent but small early-adopter audience.

“It’s going to be small market, not even as big as the current PDA market,” she said.
But one might consider the “Dick Tracy-style” watches just a taste of wireless information services expected to mushroom in the marketplace. “In 2004, MSN Direct will be on a multitude of devices, such as wall magnets that will tell you the day’s weather forecast,” Li said.

In the smart watches service, MSN Direct is expected to send data to the watches over its new DirectBand wireless network, which utilizes FM radio spectrum being leased from broadcast networks nationwide and in Canada. Those FM radio broadcast deals are with a variety of partners, including Clear Channel Communications .

The DirectBand network was developed with the assistance of SCA Data Systems.
The new smart watches will run on a subset of the .NET Compact Framework within Microsoft’s Common Language Runtime (CLR) environment and will be equipped with a chipset from National Semiconductor that will include an application chip with an ARM7 processor, ROM, static RAM, and a 100MHz radio frequency receiver.

In addition to media content updates, Microsoft said it would allow for instant messaging and e-mail to be sent to the wireless watch devices, but the gadgets will not have the ability initially to send messages. The company plans to integrate MSN Messenger and Microsoft Outlook into MSN Direct.

While Microsoft said MSN Direct will be available in more than 100 of the largest population centers in North America, details are still sketchy about which specific markets will have access to MSN Direct.

The watches will need to be recharged every three to five days, and even if the batteries fueling the computer functioning die out, the clock will continue to run as it is powered by a separate battery source.

It is still unclear whether watch manufacturers will support Microsoft’s bid to create a new generation of wireless watch devices and services. Citizen was on the stage with Bill Gates when he premiered the technology at CES back in January, but the company is not mentioned in the latest release.

Seiko abandoned its plans to create a sophisticated Dick Tracy-like wireless watch device called MessageWatch, because of lackluster demand for the product.

Analysts expect some early adopters to take interest in the watch and
Microsoft’s service package, but it is far from clear, whether the wireless watch market will mushroom in the coming months, and years.

Fossil and Suunto are two watchmakers that have committed to making watch devices geared to run MSN Direct; both are expected to launch marketing campaigns for the watches in the fall.

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