Microsoft and Philips seal software licence deal for TV set-top boxes

Microsoft, the software giant, and Philips, the Dutch consumer electronics group, yesterday joined forces to tackle the market for next generation set-top boxes for television.

Microsoft, the software giant, and Philips, the Dutch consumer electronics group, yesterday joined forces to tackle the market for next generation set-top boxes for television.

Philips will license Microsoft's enhanced TV software for installation in the Dutch group's set-top boxes. The first of these, running Microsoft TV, is expected to be available early next year.

Rob van Oostenbrugge, chairman of Philips Digital Networks, said: "Together, we are laying the foundation for a new generation of broadband services via internet-enabled and intelligent appliances for the mass market."

Microsoft, although an early investor in Web television, has had little impact in the market for TV set-top box software. The next generation systems, which will facilitate extensive interactivity, are expected to act as e-commerce gateways.

Philips has trailed US and European rivals, including Motorola and ST Microelectronics, in gaining set-top box marketshare. It hopes that the adoption of the new set-top box by IPC, the Dutch cable group, for an early 2001 roll-out will mark a turning point.

Jim Beveridge, european director of Microsoft's TV platform group, said the software firm would benefit from network operators' demands for enhanced interactivity.

"What people are looking for now in the next generation of set-top boxes is personalised TV and a richer interactive experience," he said. "At Microsoft we are well placed to provide that software to network operators."

Microsoft owns a 25 per stake in Telewest and a 5 per cent interest in NTL, the two main UK cable groups but Mr Beveridge couldn't say whether the technology would be adopted in Britain.