WebTV Debuts First WinCE-Based Boxes

WebTV Networks rolled out new, slimmed-down versions of its
Internet-over-television devices last week, incorporating elements of parent Microsoft
Corp.'s Windows CE operating system.

Although the second-generation models of the "WebTV
Classic" and "WebTV Plus" boxes use narrowband phone lines for Internet
access, the WinCE platform marks another step toward wider deployment of the operating
system that Microsoft wants to be an integral part of broadband-access platforms such as
digital set-top boxes.

WebTV group manager for product marketing Sharon Frinks
said the new narrowband boxes were not really considered WinCE-compatible, as they only
use some components for low-level functionality, such as printer support.

But Frinks added that the standard platform -- a
slimmed-down version of Windows aimed at non-personal computer devices -- would be
integrated more as developers added more features to the WebTV platform.

"Clearly, working with the Windows CE group allows us
to bring more functionality to our users at a faster pace," Frinks said. "To the
user, it won't always be recognizable [as WinCE], but it is absolutely one of the key ways
we will continue to add features."

A variety of set-top-box makers are working to incorporate
WebTV into their platforms although none has indicated firm availability dates yet. WebTV
executives also said they are exploring digital-subscriber-line connectivity.

The new WebTV boxes coincide with EchoStar Communications
Corp.'s new "DISHPlayer" receiver, which incorporates WebTV, along with an
8.6-gigabyte hard drive. EchoStar is offering the box at a promotional price of $199 until
Sept. 30.

A software upgrade, which will be available later this
year, will enable the hard drive to record up to eight hours of programming and give it
digital-VCR functionality.

After first saying that DISHPlayer would sell for $499,
EchoStar's promotional price significantly undercuts products with similar digital-VCR
functionality, such as the "personal television" boxes offered by TiVo Inc. and
Replay Networks Inc.

"We are subsidizing them at that price, but we hope to
accrue a lot of new subscribers with it," EchoStar spokesman Marc Lumpkin said.

Both WebTV Classic and WebTV Plus -- at $99 and $199,
respectively -- boast increased processing power and memory. Both have
56-kilobit-per-second modems, while the Plus has a 167-megahertz MIPS (million
instructions per second) processor and the Classic has a 150-MHz chip to speed Web

New features -- also available to existing WebTV
subscribers via software upgrades later this year -- include personal-Web-page-design
software, online billing statements and upgraded online-commerce support.

At the same time, both models are less than one-half the
size of their predecessors, or about the size of a portable compact disc player.

Sony Corp. and Philips Consumer Electronics Co. were able
to shrink their boxes by eliminating the internal hard drive used to store
electronic-program-guide listings.