Subject: P1394> Microsoft dangles 1394 carrot

From: [email-masked]
Date: Tue, 31 Mar 1998 08:05:34 -0500

fyi....

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* Don Wright                 [email-masked] *
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                       Microsoft dangles 1394 carrot

 Electronic Engineering Times via NewsEdge Corporation : Redmond, Wash. -
 In an effort to promote two of the particulars of its current hardware
 vision, Microsoft Corp. has inserted a clause into market-development
 agreements (MDAs) it routinely signs with PC makers. The clause promises a
 cash incentive to OEMs that ship as much as 15 percent of their systems
 starting this July with either the 1394 interface or a TV tuner on board.

 At least three PC makers contacted by EE Times said the clause has
 appeared in their MDAs this year.

 For some time, Microsoft has offered PC makers MDAs that allow OEMs to
 earn what essentially are rebates for the royalty payments on systems
 shipped with Windows. The incentives are earned by agreeing to support
 specific Microsoft marketing objectives, such as putting a Windows logo on
 their PCs.

 The new clause has raised eyebrows for some OEMs that fear Microsoft is
 exerting inappropriate influence over hardware directions. "Microsoft is
 trying to make it revenue-neutral for the OEM to add these new
 technologies, but I'm not convinced it's a totally healthy thing to try to
 force acceptance of a product that a user might not want," said one
 PC-company executive familiar with the agreements who asked not to be
 named.

 Carl Stork, Microsoft's general manager for Windows platforms, countered
 that any such marketing incentives are purely voluntary and benefit the
 industry as a whole. "Every year we have stretch goals," he said.

 The call for TV tuners comes as Windows 98 builds in first-time support
 under Windows for an analog TV tuner, electronic program guide and data
 broadcasting over the TV's vertical blanking interval. The features are
 being marketed as "WebTV for Windows," referring to Microsoft's WebTV
 Networks subsidiary purchased last year that makes Internet-based TV
 set-top boxes.

 As for the incentives to support 1394, Stork said, "1394 is desirable.
 Everybody will benefit from it because it will help sell PCs." He also
 pointed out the financial incentives only serve to defray a fraction of
 the actual costs OEMs take on to support the new technologies.

 OEMs grouse that the MDAs represent a way the software maker unfairly
 wields its monopoly power in PC operating systems. The price any given PC
 maker pays for Windows varies based on the number of PCs a company ships
 and the particulars of its MDA. "We would like a published price schedule
 for Windows, but my guess is nobody is paying the same price," said the
 source. "Microsoft keeps playing these games where everything is hidden."

 Copyright (c) 1998 CMP Media Inc.

 <<Electronic Engineering Times -- 03-30-98, p. PG178>>

 [03-30-98 at 15:22 EDT, Copyright 1998, CMP Publications, Inc., File:
 c0330239.8mp]

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