COMDEX: Gates touts MSN-Based 'Net appliance

Microsoft CEO Bill Gates has used his keynote speech at Comdex to show off the Web Companion, a new category of dedicated desktop appliances designed to hook up directly to Microsoft Network.

Microsoft CEO Bill Gates has used his keynote speech at Comdex to show off the MSN-based Web Companion, a new category of dedicated desktop appliances designed to hook up consumers directly to the software giant’s online service.

Aimed at providing easy and affordable access to the Internet, the MSN-specific appliances will be available from multiple vendors, such as Taiwan's Acer Group, Philips Electronics Nof the Netherlands and Vestel USA, Gates said.

Retailers will preconfigure the devices, and all users need to do when they bring them home is to plug in the telephone line and power cord, and the Web Companion will connect directly to MSN's Web portal site and other Microsoft services such as the vendor's Hotmail free e-mail service.

The Web Companion will be priced as low as in the $US399 to $499 range, said market analyst Tim Bajarin, president of Creative Strategies Research, giving media representatives a sneak preview of two such devices from Vestel prior to Gates' speech today.

Powered by National Semiconductor's highly integrated, low-cost Geode processor and running Microsoft's Windows CE, the Vestel prototypes came in two different shapes. One featured a flat-panel display and the other one was an all-in-one with the device built into a 15-inch monitor.

Vestel officials said they expect to ship the vendor's Internet.Terminal family of devices in the second half of next year. The company is also readying a third model called Web Pad that will be wireless.

In addition to the initial purchasing price, users are also likely to have to sign up for a fee-based subscription program, but Gates did not disclose any details about the charges.

Microsoft’s decision to directly tie consumers to its Internet access service marks a dramatic shift in the company’s strategy, Bajarin said.

“It is really Microsoft’s bridge to the 'Net economy,” Bajarin said. "It gives them (Microsoft) lots of potential for revenue sharing across multiple business models."

Microsoft, in Redmond, Washington, can be reached at +1-425-882-8080, or at http://www.microsoft.com/. Vestel USA, in Mountain View, California, is at http://www.vestel-usa.com/.

(James Niccolai contributed to this story.)

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