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WebTV tunes in Hitachi, Mitsubishi

WebTV Networks cuts deals with both Hitachi Home Electronics and Mitsubishi Consumer Electronics to deliver WebTV products to market.

WebTV Networks, a maker of TV set-top Internet boxes, today announced deals with both Hitachi Home Electronics and Mitsubishi Consumer Electronics. Under the agreements, the two consumer electronics giants will deliver WebTV products to market.

Mitsubishi intends to bring WebTV-based products to market in time for the holiday season. As WebTV devices are almost entirely aimed at consumers, that period is a critical time for sales of set-top boxes. Hitatchi has not yet announced when it will bring WebTV-based products to market.

The announcements were made at the E3 conference in Atlanta.

WebTV products are already produced and marketed in the United States by Sony and Philips Electronics.

Pricing for the WebTV generally ranges between $300 and $400.

In its current form, a WebTV is a box which houses a microprocessor and accompanying electronics as well as a Web browser and other software. The box hooks up to a TV to enable Web browsing and email.

But WebTV and set-top boxes aren't the only option for Internet access via a television screen. Variants of standard PCs with the TV capability, commonly referred to as PC-TVs, offer more features, and more flexibility than WebTV options--though at a much higher price.

Targeted at the higher end of the "convergence" market of consumer electronic-personal computer hybrids, devices such as Gateway 2000's Destination are competing for dominance in the living room. Such devices, while several times more expensive than the WebTV, can offer a number of powerful features, such as the newly announced DVD drive in Gateway's new Destination system as well as a full set of typical PC features.

Compaq is also offering a PC-TV called PC Theater.

WebTV's $425 million purchase by Microsoft still is awaiting regulatory approval. The company currently claims more than 85,000 subscribers, and says 67 percent of those connect to the Internet daily. Recent upgrades to the WebTV system include the ability for customers to choose their ISP, and the ability to print using a print adapter and Hewlett-Packard printer.

Documents filed with the Securities and Exchange Commission stated that WebTV was facing the prospect of a cash crunch by March 1998 when the deal with Microsoft was announced. WebTV officials denied cash flow problems, pointing out they declined an earlier $375 million offer from Microsoft.