Microsoft, Compaq unveil new Internet device

SEATTLE (Reuters) -- Software giant Microsoft Corp. and computer titan Compaq Computer Corp. on Tuesday took off the wraps on a new "Internet appliance" to offer a cheaper and easier route to the Web than a full-blown personal computer.

The new product, called the iPaq Home Internet Appliance, is powered by Microsoft's Windows CE operating system for smaller devices, and will let users surf the Internet and read and send e-mail, the companies said.

The announcement is also the first step by the companies to deliver simpler, non-PC devices for the home that many analysts say will rival more expensive and complicated desktop computers in sales within a few years.

"Novice Internet users and particularly those wanting easy-to-use devices will appreciate its simplified features that allow them to maximize their Internet experiences," Mike Larson, general manager of Compaq's consumer products group, said in a statement.

The gadget comes pre-loaded with software that allows one-touch access to Microsoft's MSN Internet access service, can be updated with new software automatically, and turns on and off like a television, the companies said.

The appliance is to hit stores within the next two weeks and will sell for as low as $599, but customers could receive a $400 rebate if they committed to buying the MSN Internet service for three years at a monthly rate of about $22, the companies said.

Also included are a wireless keyboard, a modem, and four universal serial bus, or USB, ports for plugging in additional devices like a mouse or printer. Accessories like speakers, a printer and a mouse are sold separately.

It has a 10.1-inch flat-panel screen and weighs about 6 pounds (2.6 kg).

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