Microsoft Should Consider Competitive Licensing Model to Counter Linux Momentum

LONDON, Mar 9, 2004 (BUSINESS WIRE) -- According to a new Strategy Analytics Connected Home Devices report, more set-top box manufacturers might consider Microsoft's CE.Net platform if a competitive licensing scheme were available. However, the Redmond, Washington giant must move quickly since Linux momentum is building steadily. Linux is a leading contender to become the standard operating system in advanced set-top boxes, such as Digital Video Recorders (DVRs) and IPTV.

Linux already serves as the operating system in devices such as TiVo and Echostar's DVR. It also features in many of the IPTV set-top boxes used by telephone companies to deliver television and video-on-demand over telephone wires. Linux is both sophisticated enough to support advanced functions, such as video recording and IP delivery, and economical since it does not require licensing fees.

Peter King, Director of the Connected Home Devices service, comments: "Device manufacturers are leaning towards Linux as the preferred solution for advanced set-top boxes, as evidenced by the recent Korean decision to establish the Linux IP Set-top-box Council. But Linux is not as free as it seems, since additional applications are often required, and development and integration work may add further cost."

Strategy Analytics forecasts that nearly 40 million advanced set-top boxes will be installed worldwide by 2008. The majority will be in the US, where demand for Linux-based DVRs is likely to be strongest.

About Strategy Analytics

Strategy Analytics, Inc., a global research and consulting firm, provides timely insights and strategic business solutions to companies operating at the convergence of information, communications and entertainment technologies. With worldwide headquarters in Newton, MA and principal offices in England, France and Germany, Strategy Analytics focuses on market opportunities and challenges in the areas of Automotive Electronics, Broadband, Telematics, Wireless Strategies and Enabling Technologies. For more information, see [HYPERLINK@www.strategyanalytics.com.]

SOURCE: Strategy Analytics, Inc.

Strategy Analytics, Inc. European Contact: Peter King, +44 1908 423 615 [e-mail:pking@strategyanalytics.com] or US Contact: James Penhune, 617-614-0701 [e-mail:jpenhune@strategyanalytics.com]