Sony will license Windows CE for use in consumer electronics equipment like digital TV set-top boxes. In turn, Microsoft will license Sony's Home Networking Module, which allows audio-video devices and consumer electronics equipment to interoperate, the two companies said in a press conference.
Windows CE is currently found in handheld computers, and the software giant is pushing aggressively for its inclusion in palmtops, assorted business and consumer devices, and even cars. It will also appear in the next generation of Microsoft's WebTV set-top box.
Both companies declined to specify jointly developed products in the works. However, Sony, as a developer of WebTV, will be among the first to produce and market the next-generation WebTV featuring Windows CE.
"This is a recognition on our part that the TV will play a central part in people's homes for access to information and communication as well as TV-based entertainment," said Craig Mundie, senior vice president at Microsoft.
The two companies agreed to develop and support the 1080 interlaced (1080i) format for digital TV pictures, a format widely supported by the television industry. Additionally, Sony said it will develop equipment based on the 480 progressive (480p) display format, a format supported by the PC industry.
The progressive format is a better technology than the interlaced technology, but the numbers refer to the number of lines in the picture resolution. Thus 1080i is a sharper image than 480p.
Sony said that it will support as many DTV (digital TV) formats as possible in the hope of creating a DTV receiver capable of handling all digitally produced programs, regardless of the format.
"We need to deal with the realities of the situation now, and get to the same place," said Howard Stringer, president of Sony America. "If we didn't step up, high definition television would never get started."
Sony and Microsoft each said that the alliance will result in lower-priced, hybrid consumer electronic and audio-video products in the near future. "It is worth remembering that at the moment, the consumer is faced with a dizzying array of remote controls," Stringer concluded. "This will enable all of those devices to interoperate.
"It's going to make the consumer's life much simpler, and that's the big deal, I think."
Just hours after the alliance was announced, the European Commission told Reuters the plan will be reviewed by the European Union for possible fair trade violations. The deal must be approved by the 15 EU countries, a Commission spokesman said.