July 29, 1999 Web posted at: 9:14 a.m. EDT (1314 GMT) by Clare Haney

From...

(IDG) -- Microsoft is expecting that the first Windows CE-based set-top boxes designed specially for use in China will begin to become generally available by the end of this year, a company executive confirmed early today.

Known by the codename Venus, the devices allow Microsoft and its hardware partners to target the many millions of Chinese who are currently unable to afford computers, but are keen to hook up to the Internet.

Sean Zhang, managing director of Beijing-based Microsoft China Research and Development, told IDG News Service that the company is hoping the devices will be priced below 2,500 renminbi (US$302). However, he stressed that the price of Venus computers will be set by the manufacturers of the devices, not by Microsoft, which is only contributing the operating system and initial applications for Venus.

The Venus devices will be able to plug in to TV monitors, thus Web-enabling the sets, and can be accessed via keyboards, joysticks or mice. There are more than 300 million TV sets in China, according to recent estimates. PCs have yet to penetrate the market in anything like those kinds of numbers, due in part to their high price and concerns about ease of use.

Venus was officially announced in March of this year when Microsoft Chairman and CEO Bill Gates made his first visit to Shenzhen, one of China's SEZs (special economic zones). SEZs are areas established by the federal government to encourage foreign companies to set up businesses there and invest in the region.

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The handful of initial partners who signed up in March to produce Venus computers based on Microsoft's Windows CE included the Acer Advanced Labs unit of Taiwanese vendor Acer Group, Chinese PC and handheld maker Legend Holdings, Mainland electronics giant Hai'er Group and Philips Consumer Electronics. Zhang said that other hardware vendors have signed up since then to license the Microsoft technology, but he wouldn't reveal their identities.

From the start, Venus was designed by Chinese developers in Microsoft's Beijing research laboratory for the Chinese market, as an educational and entertainment device and a way to access the Internet. The device's embedded software includes a simple word processor based on Microsoft's Pocket Word software, the vendor's Pocket Excel spreadsheet application and a series of games and learning tools, Zhang said.

All the applications are in simplified Chinese, the form of the written language in use in Mainland China. Venus also draws on Microsoft's Web browser Internet Explorer and its WebTV service. "Most importantly, the device provides a browser designed for TV," Zhang added.

Describing Venus as being able to function as "a simple Window-similar computer," Zhang said he expects that many third-party software developers will provide additional applications for the device in future.

Although he stressed that Venus is aimed squarely at the Chinese market, Zhang didn't rule out the possibility of Microsoft perhaps looking to offer the technology elsewhere in the world.

As for the product name for the device, that has yet to be determined, but it's possible that the Venus name may be carried forward when the devices ship, Zhang said. He confirmed that the set-top boxes will feature some form of Microsoft branding, much like the Windows stickers on today's PCs and notebook computers.

Microsoft is not making any public estimates about future sales of Venus devices, Zhang said. He also wouldn't be drawn on specific technical details, such as whether Venus would be linked up to other devices like VCD (video compact disk) players via Microsoft's own Universal Plug & Play technology. There are an estimated 40 million VCD players in China, according to recent market estimates.