WebTV more like PC

Even as major manufacturers are readying a third generation of the WebTV set-top box that's capable of word processing and other PC applications, one company, Philips Electronics, is moving into Asia's Internet set-top markets without WebTV.

Philips, Sony, and Mitsubishi are developing a prototype WebTV unit that loads versions of Microsoft Word and Excel for the Windows CE operating system, according to industry sources. The new version, which would dramatically expand the platform's functionality, will also contain Microsoft's slimmed-down version of the Windows OS.

Word, Excel, and other programs, which could be loaded from a credit-card-sized "smart card" inserted in the unit, have been traditionally offered only on PCs but may now become available in households that couldn't afford PCs or otherwise weren't interested in PCs. WebTV set-tops typically cost between $60 and $200, far less than a desktop system.

WebTV is also showing vendors plans for a "WebTV DVD" unit which incorporates a DVD drive for viewing movies or possibly even third-party applications such as games, sources said. Units with the new features could be introduced this fall, but sources speculated that the products would not be available until 1999.

Meanwhile, Philips today announced it will be using a competing operating system and browser technology from a company called QNX for Internet set-top devices to be sold in Singapore and Malaysia. Philips then may expand its work with QNX into Australia, China, and the Philippines.

The second generation of WebTV boxes, called WebTV Plus, came out in limited availability in late 1997. The WebTV technology was originally intended to be as simple as possible, but news of the possible new features shows that vendors of these devices are now compelled to add functions to keep ahead of the improving set-top boxes being offered to cable TV customers.

Cable companies such as Time Warner Cable are already offering electronics programming guides and Internet access through cable set-top boxes, with plans to expand the availability of these services to an increasing number of America's 60 million cable TV subscribers.

Currently, WebTV Plus and WebTV Classic units offer the ability to surf the Internet and send and receive email. WebTV Plus units also allow users to find information on TV programs through an electronic program guide, and view Internet and TV simultaneously through a 'picture-in-picture' window.

The possibility of WebTV becoming more PC like as a natural evolution of the company's strategy, observed Jae Kim, analyst with Paul Kagan Associates.

As licensees saturate the market for people who want a simple, inexpensive device, companies like Philips and Sony are moving on to customers such as students or low-income households who want affordable computers with Internet access, Kim said. "This 'revolution' happening is just a rehash of what happened ten or fifteen years ago," he noted, referring to inexpensive computers such as the Commodore 64 that were designed to be hooked up to TVs--without the capability of Internet access.

Separately, Philips' move with QNX may be a way to get around limitations in its license with Microsoft and expand its market. Philips has a license to sell WebTV devices in the United States and United Kingdom, while Sony's license allows it to sell units in the United States and in Asia, according to WebTV officials.

By using different technology for its Internet set-top boxes sold in Asia, Philips will be able to compete in a market that could surpass the U.S. market for such devices as countries like Singapore look to offer Internet services to their citizens.

WebTV could not be reached for comment.