Microsoft working on new WebTV chip

SEATTLE (Reuters) -- Microsoft Corp. has designed a powerful new chip to run its WebTV interactive television service as the software giant races for a head start in the sector, a company executive said Wednesday.

The new chip, called Solo2, is the latest in a string of special processors designed by the WebTV team to combine Internet browsing, interactive television and video recording on a regular TV set.

The main contribution of Solo2 is its ability to handle several streams of digital video at once, allowing users to watch or record several programs at the same time, Tim Bucher, vice president of WebTV's consumer products division, said in an interview.

"It integrates in a single device not only Internet capability, not only interactive television capability, but very advanced digital TV capability," Bucher said.

The WebTV chips hold an unusual place in Microsoft's product line-up because while the company does make some hardware like keyboards or joysticks, it rarely dabbles in chip design, preferring to leave that task to partners like Intel Corp., which makes most of the chips running Windows-based computers.

"If we can't find solutions that are cost effective and that can't create the kind of user experiences that we want, then we build them," Bucher said.

The chip, which will be manufactured by Japan's Toshiba Corp., will make its debut in WebTV's Ultimate TV platform that is expected to launch this fall, Bucher said.

Ultimate TV will compete against a similar offering by Internet services giant America Online Inc. called AOL TV that is to go on sale later this year.

Bucher said the chip had been in development for about 18 months and cost less than $20 million to develop, though WebTV has spent a total of around $100 million developing different hardware and capabilities for its products.

Microsoft bought Mountain View, Calif.-based WebTV in 1997 and has signed up more than 1 million subscribers to the service, which requires a special set-top box and a monthly service fee.

Copyright 2000 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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