M
moose
Microsoft, in middle age, to go beyond the PC
GENEVA, Oct. 12 - When Bill Gates, the chairman of Microsoft, gives his
keynote address on Monday at the international exhibition here he plans to
show off some of the company's latest technology - software that powers
mobile phones, online game machines and television services.
Those areas are crucial to the company's long-term strategy. And so the
industry is watching to see whether Microsoft can be innovative enough to
compete effectively in software platforms beyond the personal computer. The
goal is to provide software giving consumers access to content from a
variety of gadgets: showing family slides on a personal computer, television
or game console, for example, or tapping into a personal music library from
a mobile phone, TV, laptop or stereo.
Already, consumers use many of Microsoft's Xbox game consoles to watch
DVD's. And it is possible to listen to music and watch the accompanying
video on a Microsoft-software-powered personal computer, mobile telephone
and television.
The company says that its investments in the new areas are a long-term play.
Microsoft, which is pouring more than $6 billion annually into research and
development, "has the financial flexibility to stay the course for a lengthy
period of time," said John G. Connors, the chief financial officer.
Microsoft is also marketing its TV technology to phone and cable operators.
Interactive TV is an area that many companies have been aiming at for a
dozen years. Microsoft has come up with a variety of new technology
solutions in the last 18 months that do a better job of meeting customer
demands, analysts say.
One example is a TV delivery service based on Internet standards that allows
carriers to deliver new pay TV services over existing high-speed Internet
connections. An experimental model of the system will be on display for the
first time at the show here. The technology will be tested by phone
companies in Canada and India, said Ed Graczyk, director of marketing for
Microsoft TV.
Phone companies need to compete with cable and satellite operators, which
are able to deliver voice, data and video services. Microsoft's pitch is
that the Windows Media 9 version of its Media Player is a cost-efficient and
technologically superior way of compressing video over a limited amount of
bandwidth, allowing phone companies to deliver pay-TV services to set-top
boxes.
In game consoles, Microsoft went from nowhere to become No. 2 worldwide, but
it is still way behind Sony. The research and consulting firm International
Data Corporation forecasts that Sony will control 61.1 percent of the game
console market at the end of this year, compared with 22.9 percent for
Microsoft and 13.5 percent for Nintendo.
But Microsoft is interested in selling more than boxes. It is putting a lot
of emphasis on Xbox Live, an online game service that it says is driving
broadband traffic for phone companies.
Microsoft's cash hoard gives it a huge war chest, and it is looking to gain
dominance 10 to 15 years from now, after two or three more generations of
consoles have been released, according to Michael Goodman, a Yankee Group
analyst.
A Microsoft executive seemed to support that view. "It is a marathon, not a
sprint, and we are pretty good at marathons," said Peter Moore, vice
president for worldwide retail sales and marketing at Microsoft's home and
entertainment division.
GENEVA, Oct. 12 - When Bill Gates, the chairman of Microsoft, gives his
keynote address on Monday at the international exhibition here he plans to
show off some of the company's latest technology - software that powers
mobile phones, online game machines and television services.
Those areas are crucial to the company's long-term strategy. And so the
industry is watching to see whether Microsoft can be innovative enough to
compete effectively in software platforms beyond the personal computer. The
goal is to provide software giving consumers access to content from a
variety of gadgets: showing family slides on a personal computer, television
or game console, for example, or tapping into a personal music library from
a mobile phone, TV, laptop or stereo.
Already, consumers use many of Microsoft's Xbox game consoles to watch
DVD's. And it is possible to listen to music and watch the accompanying
video on a Microsoft-software-powered personal computer, mobile telephone
and television.
The company says that its investments in the new areas are a long-term play.
Microsoft, which is pouring more than $6 billion annually into research and
development, "has the financial flexibility to stay the course for a lengthy
period of time," said John G. Connors, the chief financial officer.
Microsoft is also marketing its TV technology to phone and cable operators.
Interactive TV is an area that many companies have been aiming at for a
dozen years. Microsoft has come up with a variety of new technology
solutions in the last 18 months that do a better job of meeting customer
demands, analysts say.
One example is a TV delivery service based on Internet standards that allows
carriers to deliver new pay TV services over existing high-speed Internet
connections. An experimental model of the system will be on display for the
first time at the show here. The technology will be tested by phone
companies in Canada and India, said Ed Graczyk, director of marketing for
Microsoft TV.
Phone companies need to compete with cable and satellite operators, which
are able to deliver voice, data and video services. Microsoft's pitch is
that the Windows Media 9 version of its Media Player is a cost-efficient and
technologically superior way of compressing video over a limited amount of
bandwidth, allowing phone companies to deliver pay-TV services to set-top
boxes.
In game consoles, Microsoft went from nowhere to become No. 2 worldwide, but
it is still way behind Sony. The research and consulting firm International
Data Corporation forecasts that Sony will control 61.1 percent of the game
console market at the end of this year, compared with 22.9 percent for
Microsoft and 13.5 percent for Nintendo.
But Microsoft is interested in selling more than boxes. It is putting a lot
of emphasis on Xbox Live, an online game service that it says is driving
broadband traffic for phone companies.
Microsoft's cash hoard gives it a huge war chest, and it is looking to gain
dominance 10 to 15 years from now, after two or three more generations of
consoles have been released, according to Michael Goodman, a Yankee Group
analyst.
A Microsoft executive seemed to support that view. "It is a marathon, not a
sprint, and we are pretty good at marathons," said Peter Moore, vice
president for worldwide retail sales and marketing at Microsoft's home and
entertainment division.