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Microsoft Secures Prime Time on TV Screens with AT&T Partnership

Strategic Insights

— 1 min read

Microsoft's recent partnership with AT&T is set to bring the Windows operating system to millions of television sets, as part of AT&T's plan to deliver high-speed internet and interactive TV services to 21 million US households. Through its $5 billion investment, Microsoft has secured a critical head-start in supplying software for the next generation of high-speed networks, which will link TVs to the internet. This deal will enable Microsoft to supply 7.5 to 10 million copies of Windows CE, a scaled-down version of the PC operating system, for use in television set-top boxes. With this agreement, Microsoft is guaranteed a strong market position, potentially installing Windows CE in at least one-third of AT&T's target households.

Key Takeaways:

  • Microsoft has partnered with AT&T to supply software for the next generation of high-speed networks, which will bring internet-style services into the living room.
  • Microsoft will supply 7.5 to 10 million copies of Windows CE, a scaled-down version of the PC operating system, for use in television set-top boxes.
  • This deal will enable Microsoft to establish software standards for TV set-top boxes, potentially setting a precedent for the industry.
  • Competitors, such as Sun Microsystems, may face a setback in their efforts to break Microsoft's PC software stronghold.
  • Microsoft's cash hoard of close to $22 billion gives the company a significant advantage in competing for customers and talent.
  • AT&T's agreements with Microsoft are not exclusive, but Microsoft's strong market position may make it difficult for other vendors to compete.

Statistics:

  • 21 million US households will be targeted with AT&T's new interactive TV services.
  • 7.5 to 10 million copies of Windows CE will be supplied for use in television set-top boxes.
  • Microsoft has a cash hoard of close to $22 billion.

Sources:

  • "Financial Times Limited 1999. All Rights Reserved."
  • Zona Research
  • AT&T
  • Microsoft
  • Sun Microsystems
  • AOL
  • TCI
  • MSNBC
  • Expedia

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