Tech Industry

Hitachi driving Windows home

Microsoft is stepping up efforts to move its Windows CE operating system into new markets.

Microsoft is stepping up efforts to move its Windows CE operating system into new markets, inking a deal with Hitachi in which the Japanese electronics manufacturer will add to its lineup of handheld computers and create a new breed of home computing devices.

Under an expanded strategic alliance, Hitachi has agreed to use Microsoft's slimmed-down operating system (OS) in a "broad range of devices" comprising 10 to 15 new products over the next five years, said Jonathan Roberts, a Microsoft group director.

Hitachi will establish a development organization charged with creating hardware and software products for the Windows CE platform, which Microsoft hopes to see incorporated into a number of different products.

The two companies stated they plan to develop a "home multimedia station" that would be able to take digital data from the Internet, television, and satellite broadcasts; digital cameras; and DVD and manipulate and store images and audio, for instance. Although not called such, the planned devices are akin to the digital set-top boxes that cable companies are planning, except they could have additional capabilities such as the ability to play DVD disks.

Richard Doherty, president of consulting firm The Envisioneering Group, calls the device a "home entertainment computer" because it will be more expandable than a cable set-top box. Hitachi may want to include its graphics chip technology to offer game playing capabilities, he noted, or offer an add-on component that decodes high-definition digital television signals for playback.

The device is slated to be released in the autumn of 1999, a Hitachi spokeswoman told Reuters. The system will follow on the heels of the introduction of a new game console from Sega Enterprises that is also based on Windows CE.

In addition to the multimedia device, the two companies will work to evolve PC companion products such as handheld PCs based on Hitachi microprocessors. Such devices are expected to include a mini-notebook-sized device available later this year that could steal away sales from similarly sized notebooks that run Windows 95.

As the adoption of PCs into U.S. homes slows, Microsoft, Hitachi, and PC hardware companies are looking at moving PC technologies into low-cost consumer electronics devices. While there are now computers in 42 percent of American homes, this compares to 89 percent penetration for VCRs and 98 percent for televisions, according to the Consumer Electronics Manufacturers Association.

Even as Microsoft steps up its efforts to get Windows CE adopted, it faces a number of hurdles. One of the largest is general fear of Microsoft itself. The company had to negotiate long and hard with a reluctant TCI in order to win a place for its operating system in TCI's next-generation cable set-top boxes. To maintain a balance of power, TCI also licensed Java software from Sun Microsystems for use in the same devices. Hitachi itself said it will roll out 30,000 TV set-top boxes in Japan based on Java software technology.

Also, industry experts say that in devices such as digital set-top boxes, CE is too immature a technology to find widespread use.

Microsoft is working to counter these problems. The companies announced today that Hitachi will offer technology that will increase the effectiveness of Windows CE when used in applications such as digital set-top boxes or industrial controllers--applications that require quick response times and continuous operation. Currently, Windows CE doesn't respond to user commands fast enough to fall within the strict operating parameters referred to as "real time."

Microsoft has already stated its intention to incorporate real-time capabilities into the OS, but cited Hitachi's experience in this area as a benefit of the expanded alliance, also saying that technology from Hitachi that will provide additional capabilities.

No money changed hands in the deal, which was signed June 16 by Hitachi president Tsutomu Kanai and Microsoft chairman Bill Gates, Roberts said.

Reuters contributed to this report.