Microsoft's television division is licensing its software to major cable operators in Mexico as it builds momentum for its tests in the United States.
Microsoft TV Division will announce Tuesday that it is signing three of the largest cable operators in Mexico to use its software in set-top boxes to be installed in subscribers' homes. The companies have already begun sending subscribers boxes that use Microsoft TV software, such as Microsoft's interactive program guide, its Foundation Edition software and Microsoft TV Advanced. When the installations are complete, Microsoft TV software should be in about 725,000 boxes by the end of 2004. The deals are nonexclusive, multiyear agreements, and Microsoft has not invested in any of these operators, according to Ed Graczyk, a director of marketing at Microsoft TV Division.
The announcements are a good sign that Microsoft's change in television software strategy--from promoting advanced television software platforms to simpler platforms--is gaining an audience amongst fickle cable operators, but analysts say the Mexican market is still a "tier 2" market compared with the larger and more elusive U.S. market. "Mexico is a good-sized market, but it's more competitive in the United States for a reason," said Aditya Kishore, an analyst with research firm The Yankee Group. "The United States is make or break for them, and that's where they need to focus."
Microsoft started off with more advanced television software for set-top boxes, allowing cable subscribers to access e-mail, surf the Web and chat, but it dialed back the features of its software as cable operators--the main customers for television software--decided to go with less advanced and less equipped set-top boxes.
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News source: C|net News
