P1394 Mail Archive: P1394> Microsoft dangles 1394 carrot

P1394 Mail Archive: P1394> Microsoft dangles 1394 carrot

P1394> Microsoft dangles 1394 carrot

Tue, 31 Mar 1998 08:05:34 -0500


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* Product Manager, Strategic Alliances *
* Lexmark International *
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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

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:

Entire contents (C) 1998 by INDIVIDUAL, Inc., 8 New England Executive Park
West, Burlington, MA 01803.