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Microsoft unveils MSN Web appliance design

Whole new market gets opportunity to not be interested in Windows CE

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Microsoft yesterday came up with some more information about its MSN Companion Web "toaster," but stayed bashful about the most important bits - how much it's going to cost, and how it's going to be sold. The MSN Companion is intended to be a cheap Internet access appliance for the masses who can't afford computers, and by happy coincidence the act of wiring them up is intended to boost MSN's subscriber base. The CE-based appliances are being built by Acer, Philips, Thomson Consumer Electronics and Vestel USA, and will be out in the middle of next year. Microsoft devices of this class will ultimately wind up going head-to-head with the gizmos AOL intends to market ('sell' would really be the wrong word here), and to some extent with Microsoft's own WebTV, although the company has taken some pains to explain why this last bit won't be the case. But really, the Companion is more a piece of packaging than a new product as such. It's intended to come in different shapes and sizes, including LCD variants, little ones and monitor plus keyboard units. Trial fanciers can have a wry chuckle over Microsoft's explanation of the Companion's advantages for the companies building it: "Because the device is an integrated end-to-end management platform, it frees OEMs from having to harness individual components such as client and server software, Internet access and back-end services-all of which can be significant barriers to building a Web companion device. The streamlined browser-based platform is designed to set the stage for hardware innovation, freeing OEMs to focus on differentiation and delivering highly functional Web companions to consumers." That is, Microsoft seems to have integrated the lot this time, and will be calling most of the shots over specification and software, leaving the manufacturers to differentiate by, er, making them look different. But that's actually pretty logical in this area - companies building this class of box will want to sell them by the million and won't want to be putting money into software development, and the AOL boxes, when they come along, will likely take a similar route, albeit with a different operating system. Microsoft sees the Companion as being the sort of thing you can sit on your kitchen table and use as easily as a toaster. We don't wish to carp, but can't resist suggesting that this would be something of a first for a Microsoft system. In order to get it onto that kitchen table, however, Microsoft is going to have to come up a sales system that stands a chance of attracting non Web-enabled users by the ton. That in itself will be tricky, and the problem will be exacerbated by the service it's chained to. AOL and others currently beat MSN as an ISP by miles, and if AOL and others put out similar devices via similar marketing programmes, why should anything change? Undoubtedly the Companions will go out via the MSN stores within stores in Tandy outlets. If they're sold outright, the tag will probably be in the region of $200, but some kind of rental plus subsidy arrangement, the kind of scheme ISPs are starting to borrow from the mobile phone business, is likely to be more effective. The upfront subsidy per box is going to have to come from MSN itself, so this is going to be a pretty expensive programme for Microsoft. Between now and the actual product rollout we can expect to hear that other ISPs will use similar platforms, but again Microsoft is likely to find it tough to sell the concept to them. Current programmes in this area are based on bargain basement or 'free' PCs, and as CE has so far been pretty much a failure as an operating system for the appliance and set-top box sectors, it's difficult to see what there is about the Companion that will change this. ®

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