MS goes hardware: MSN Web Companion

In an unusual move by the software giant, Microsoft will sell an 'Internet appliance' for those people who don't need a PC.

Microsoft Corp. is hedging its bets that the PC may not be center of the computing universe forever.

The company Thursday previewed a new computing device called the MSN Web Companion, a move that could ignite more interest in the evolving "Internet appliance" market.

It also could push Microsoft (Nasdaq:MSFT) more into the hardware business, in possible competition with some of its PC-manufacturing customers.

The device, Microsoft says, will allow consumers to access Web-based services, such as Web browsing and e-mail, without a computer. It uses Windows CE as its operating system and Microsoft's MSN service to get on the Internet.

Beyond the PC
The company, at its MSN portal strategy announcement Thursday, said the device is part of an effort to deliver new methods, besides PCs, for consumers to connect to the Internet.

The device "is designed for people who want a simple way to get on the Internet, and don't have a need for PC-based applications," the Microsoft said in a statement.

The MSN Web Companion will be available in desktop or portable models. Microsoft will begin a beta program for the device by the end of the year, company officials said.

Pricing has yet to be determined, however it will be discounted as part of an MSN subscription, the company said. MSN currently offers a similar program for new PC buyers who sign up for its service for 36 months, however they receive a $400 rebate from the company.

It was not immediately clear if Microsoft would sell the MSN Web Companion under its own brand, license it to manufacturers, or both.

The idea of an "Internet appliance' is growing more popular. For example, America Online Inc. (NYSE:AOL) Has said it might produce such a device based on National Semiconductor Inc.'s Geode chip.

And several companies offer phones that provide rudimentary Web access.

The MSN Web Companion is expected to ship sometime in the middle of next year.