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Microsoft to cobrand PCs in U.K.?

Viglen Technology says it has signed an agreement with the software giant to help brand and market a line of computers for home users.

A relatively small PC manufacturer in the United Kingdom kicked off an international mystery today when it announced that it would begin to co-brand computers with Microsoft.

Viglen Technology said that it has signed an agreement with the Redmond, Washington-based software giant to co-brand and co-market a line of computers for home users. The new computer line will carry the name of the Viglen HomePro and consist of one desktop and three mini-towers.

"Viglen has been the PC brand of choice for the experienced PC buyer through the direct channel," said Bordan Tkachuk, the company's CEO in the release.

Viglen did not clarify where or how the Microsoft name would be sandwiched into the "Viglen HomePro" brand name. The systems will ship in two weeks and be available through select retail outlets.

So far, observers are scratching their heads. Microsoft has for the most part avoided getting into the hardware business directly, primarily to avoid conflicts of interest between itself and the vast numbers of computer vendors that buy its software. At the same time, Viglen, although a well-known vendor in the UK, does not hold the type of dominant market share that might make such a move worthwhile.

The company holds only 2.6 percent of the U.K. market, according to Charles Smulders, senior industry analyst at Dataquest. For the first half of the year, it shipped 45,000 units. Most of the company's sales go to the education and government market.

"I'd be interested to understand what this means," said Smulders, who happens to be English. "Viglen is a relatively generic local player. "

A spokeswoman at Waggener Edstrom noted that the announcement, which can be found on the Viglen web site, does not contain a phone number of Microsoft's public relations agency.

Nonetheless, this would not be the first co-branding deal for Microsoft. In March 1996, Microsoft entered into a co-branding agreement with Hewlett-Packard to market the "Hewlett Packard & Microsoft Small Business Center" line of computers, a hardware/software bundle centered around the Vectra 500. Considered an unusual move at the time, the Microsoft name has since been pushed into the background on HP's efforts in marketing the Vectra 500.