Matsushita Electric Industrial Co. and Microsoft Agree to Combine Efforts On Digital Audio, Video and PC Technologies As Part of Expanded Relationship

REDMOND, Wash., July 8, 1998 — Matsushita Electric Industrial Co. Ltd. (Matsushita) and Microsoft Corp. today announced that they have signed a memorandum of understanding to formalize their long-standing relationship. The companies share a desire to accelerate the convergence of digital audio-visual technology and personal computer technology and have agreed to focus on digital convergence projects, combining Matsushita ‘s technology and experience in audio-visual (AV) products with Microsoft ‘s complementary technology and experience in computer software products.

Joint efforts by the companies will focus on development of digital television technologies for next-generation PCs, including support for the reception and display of digital television broadcast signals and associated interactive programs. In addition, Matsushita plans to deploy analog WebTV® terminals in Japan targeted at the 1998 winter selling season, and Matsushita and Microsoft will collaborate on the development of digital cable advanced set-top boxes (ASTBs) for public network and retail customers. To simplify ongoing collaboration, both companies will create a corporate licensing policy that provides Matsushita with the option to use the Microsoft® Windows® CE operating system in Matsushita ‘s future products, including AV and personal computer devices.

“Matsushita has led the consumer electronics industry with advanced technologies such as optical disc and digital video recording,

said Yoichi Morishita, president and CEO of Matsushita.”
The introduction of DVD systems and DV-format camcorders is already enhancing consumer benefits in this digital age. Our long-standing commitment to respond to consumers ‘ demand for ease of use and reliability will help the convergence of consumer and PC platforms for the home market. The strategic partnership with Microsoft is a step toward making such a path more evident and will be welcomed by consumers. ”

“Microsoft’s working with Matsushita over the coming years will provide tremendous opportunities for consumers to benefit from the results of innovative, collaborative thinking, ” said Bill Gates, chairman and CEO of Microsoft. “The PC and consumer electronics industries each have a wealth of expertise that, when brought together, will result in more intelligent, integrated and easy-to-use consumer devices. Together we will work to move these industries forward.

The basic agreement on joint development efforts covers the following areas:

  • Develop the next generation of PC technology for receiving, decoding, processing and displaying digital television broadcast signals and associated features.

  • Planned launch of WebTV terminals in Japan targeted at the 1998 winter selling season and collaboration on the development of digital cable advanced set-top boxes.

  • Porting Windows CE to adapted versions of Matsushita

  • Creation of a corporate licensing policy that will offer Matsushita the option to use Windows CE in multiple product categories in AV and computer products.

About Matsushita

Best known for its Panasonic brand products, Matsushita Electric Industrial Co. Ltd. (NYSE
) is one of the world ‘s largest manufacturers of CD-ROM drives, DVD drives and other digital electronics products for the home and office. The company’s principal U.S.

subsidiary, Matsushita Electric Corporation of America, has been a leader in the development of high-definition and digital television. For more information on Matsushita or Panasonic, visit the company’s Web site at .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT “) is the worldwide leader in software for personal computers. Microsoft offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Microsoft, WebTV and Windows are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Other product and company names herein may be trademarks of their respective owners.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at corporate information pages.

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