Microsoft Touts its Embedded OS for Set-Top Boxes

Microsoft Tuesday
continued to tip its hand about features it will include in forthcoming
products at the National Association of Broadcasters convention (NAB2003).

To make way for what it has long believed will be a lucrative Internet
Protocol-based interactive television market, the Redmond, Wash. software
concern said the pending release of its touted embedded operating system
will host its latest Windows Media digital video software and Internet
Explorer 6.0 with support for richer television Web browsing.

Specifically, Microsoft’s Windows CE .NET version 4.2 will include the
latest Windows Media 9 Series, which the company said offers the same video
quality of MPEG-2 and its MPEG-4 descendant, but in a more tightly
compressed form. Microsoft regularly claims Windows Media 9 Series superior
in quality to the nascent rival MPEG-4 technology despite analysts’ praise
of MPEG-4’s quality.

But Microsoft is also building on its partner momentum for its strong move
into interactive television. Set-top box original equipment manufacturers
(OEMs) CosTron, HUMAX, NEC and Tcom&DTVro are currently building set-top
boxes powered by Windows CE NET. Also, chip vendors ATI Technologies,
National Semiconductor, STMicroelectronics and VIA Technologies, and set-top
box software vendors iMagicTV and Stellar One Corp have also recently agreed
to prime their wares for the embedded .NET OS.

Like many technology vendors looking for a way to extend more their products
into the home realm, Microsoft is a firm believer in the proliferation of
digital subscriber lines by the public, which many experts feel will
ultimately lead consumers to hook up such items as set-top boxes for
enhanced gaming and interactive shopping.

Despite the soft economy, companies like Microsoft have been bullish on its
chances of permeating millions of homes with its digital media software. It
stands to make money from service providers looking to offer entrenched
software they know customers will recognize. Partnering with entrenched
software and hardware firms, Microsoft feels, can only augment its chances
for success. Of course, Microsoft would love sink deep into this space
before Linux gains momentum.

“IP-based set-top boxes are emerging as a key delivery platform for multiple
service operators (MSOs) that are eager to offer television and interactive
content services to homes around the globe,” said Keith White, senior
director of marketing of the Embedded and Appliance Platforms Group at
Microsoft. And MSOs can now choose from a broad range of hardware and
software providers to help them develop new offerings that are feature-rich
and cost-effective, and can be deployed quickly.”

Some industry experts predict that set-top boxes will evolve into home multimedia centers, possibly forming the hub of the home network system and the primary access for consumers to connect to the Internet. One thing seems certain: the set-top box market is very dynamic and will change dramatically over the next few years.

InStat/MDR said the cable set top box market is experiencing tough times, as many cable TV operators have dramatically cut their capital spending. Despite this, some manufacturers are continuing to develop new digital cable set top box products. For example, the PVR-enabled cable set top box and the high-definition capable set top box are currently in high demand as a few cable operators continue to introduce advanced interactive cable services.

Windows CE. NET will feature Windows Media Audio and Video 9 Series;
Internet Explorer 6.0, with enhancements for set-top boxes for easier
navigation with remote controls, Windows Messenger and Microsoft Passport;
Digital Rights Management 7.1 for content protection; and support for
MPEG-1, MPEG-4 and MP3.

One of two embedded brands from Microsoft, Windows CE .NET 4.2 is due in the
second quarter of 2003. The other, Windows XP Embedded, is intended for
devices like gaming systems, self-service kiosks, ATMs and retail
point-of-sale devices.

In related Windows Media news, DVD software firm InterVideo inked a deal
with Microsoft to port components of the Windows Media Format to run on
Linux-based consumer devices, a major step forward considering Microsoft has
often alternately pledged to keep its distance from Linux — and crush the
open-source movement. This deal paves the way for the Windows Media 9 to
find a home on Linux-based set-top boxes, personal video recorders and other
multimedia devices.

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