Microsoft Wants to Be in Your New Digital “Gadget”

Windows Media technology to be licensed cheaply:

In a bid to secure a central place for itself in the new gadgets that are increasingly the preferred platform for digital media, Microsoft said yesterday that it would license its Windows Media technology to consumer electronics makers at lower prices and better terms than its main competitors do.

Makers of digital music players, for instance, can now license Microsoft’s media encoding and decoding technologies for 50 cents for each device, about half of the licensing fee many now pay for MPEG 4 video, one of the dominant industry standard formats.

Will Poole, corporate vice president of Microsoft’s Windows New Media Platform division, said the company’s goal was not to reap huge profit on the royalties but to ensure that PC’s that run the Windows operating system work well with devices like camcorders, DVD players and portable media players that consumers want to use with them.

“Strategically, what we get from this is that the consumer will have a better experience with compatibility with all these devices,” Mr. Poole said.

Analysts said the deal was likely to be attractive to consumer electronics makers. “They’ve come up with a licensing program that is bound to shock the industry in the first hours of the Consumer Electronics Show,” said Richard Doherty, research director for the Envisioneering Group, a technology market research firm in Seaford, N.Y., referring to the annual trade show that opens this week in Las Vegas.