Microsoft and Toshiba Strengthen Relationship

TOKYO — June 27, 2005 — Microsoft Corp. and Toshiba Corp. today announced a significant expansion of the companies’ global relationship to enhance the development and delivery of innovative digital consumer electronics products and personal computers by sharing each other’s respective hardware and software technologies. The expanded collaboration is designed to accelerate the availability of new devices for the benefit of customers, while demonstrating mutual respect for each company’s intellectual property rights.

“Microsoft values our strong relationship with Toshiba, a company we admire for its long-standing commitment to innovation,” said Bill Gates, chairman and chief software architect of Microsoft. “This agreement demonstrates our desire to share our innovations with other companies in ways that promote the spread of new ideas — and benefit customers by accelerating the development of exciting new products.”



Toshiba Corp. President Atsutoshi Nishida (L) and Microsoft Corp. Chairman and Chief Software Architect Bill Gates discuss the expansion of their companies’ relationship at a news conference, Tokyo, June 27, 2005.

The two companies have agreed to investigate development of HD DVD players using Microsoft® Windows® CE technology, by bringing together Microsoft’s expertise in software and PC technologies with Toshiba’s expertise in consumer electronics and computing. The companies also plan to strengthen their collaboration on iHD, the DVD Forum’s latest interactivity format.

As leaders in the PC industry, Microsoft and Toshiba promote joint ongoing projects in an effort to deliver breakthrough mobile PCs and expand the mobile market, showcasing integration of the key software features of the Windows operating system with the cutting-edge hardware technologies from Toshiba. The companies have been working closely to promote Windows XP-based Tablet PCs and Media Center PCs on a worldwide basis, offering customers new PC work styles and benefits. Microsoft and Toshiba also expect to develop and deliver compelling mobile PCs with the next version of the Windows operating system, code-named “Longhorn.”

In April 2005 the companies signed a cross-licensing agreement to promote the exchange of innovations developed by each company. The licensing agreement covers developments in computer and digital consumer electronics areas. Microsoft and Toshiba both have traditions of investing heavily in research and development, a fact reflected in the depth of their respective patent portfolios and diverse products.

“We are very excited to take our long-standing partnership with Microsoft to the next level. Our companies have worked together since Toshiba launched the world’s first laptop PC back in 1985, and we enjoy a relationship rooted in mutual respect and understanding,” said Atsutoshi Nishida, president and CEO of Toshiba. “We look forward to extending the scope of our relations to encompass HD DVD, a major driver of the next-generation consumer electronics.”

Microsoft and Toshiba will continue to introduce new breakthrough innovations that will bring about new scenarios for years to come.

About Toshiba

Toshiba Corporation is a leader in the development and manufacture of consumer products, information and communication systems, electronic devices and components, power systems, and social infrastructure systems. The company’s ability to integrate wide-ranging capabilities, from hardware to software and services, assure its position as an innovator in diverse fields and many businesses. Toshiba has 165,000 employees worldwide and annual sales of over US$54 billion. Visit Toshiba’s Web site at http://www.toshiba.co.jp/index.htm.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.