Microsoft Announces Breakthrough Technology Enabling Simple Access to Broad Set of Digital Content, Including Music, Games, Video, Ring Tones and Pictures

BARCELONA, Spain — Feb. 12, 2007 — Today at 3GSM World Congress 2007, Microsoft Corp. announced Microsoft® PlayReady™ technology, a new multimedia content access technology optimized to meet the needs of mobile operators and handset manufacturers for digital entertainment and commerce. Supporting multiple content types, and flexible rights, Microsoft PlayReady enables operators to provide a range of new services tailored toward growing consumer interest in mobile digital media. Leading mobile operators worldwide, including Telefónica, O2, Verizon Wireless, Bouygues Telecom, and Cingular Wireless, now the new AT&T, are today indicating plans to implement Microsoft PlayReady technology. In addition, Microsoft is working with mobile industry software developer PacketVideo to showcase a fully operational demonstration of Microsoft PlayReady for the first time, at the Microsoft booth, No. 1D19 in Hall 1 at the 3GSM conference.

The result of extended dialogue with the mobile industry, Microsoft PlayReady technology enables a broad spectrum of business models such as subscription, rental, pay-per-view, preview and super-distribution, which can be applied to many digital content types and a wide range of audio and video formats. Content types supported include music, video, games, ring tones and images. Audio/video formats supported include Windows Media® Audio (WMA), AAC/AAC+/HE-AAC, Windows Media Video (WMV), and H.264. Microsoft PlayReady enhancements make it easier for consumers to move their content between their devices, giving them a new level of freedom with their digital content. This technology will be available in the first half of 2007 for handset and device implementation.

Wireless delivery of content to handsets continues to grow rapidly, underscoring the need for compatibility and interoperability. To address this requirement, Microsoft PlayReady has been designed to be fully backward compatible with Windows Media DRM 10, allowing devices that support Microsoft PlayReady to access content using Windows Media DRM. Microsoft will also provide an interoperability program so content may flow to qualifying DRM and content protection technologies.

“Our wireless partners worldwide asked for a single system to power a growing array of business models and consumer scenarios — the result is Microsoft PlayReady,” said Amir Majidimehr, corporate vice president of the Consumer Media Technology group at Microsoft. “With consumer demand for digital goods of all types growing exponentially, this technology delivers a foundation for the future and accelerates the transparent delivery of rich content to consumers.”

Demand for mobile entertainment, with worldwide revenues of nearly $19 billion in 2006,1 continues to grow across all sectors, including music services, ring tones, games and video. The flexibility of Microsoft PlayReady technology makes it attractive for leading mobile operators looking to deploy next-generation entertainment services, including Telefónica, O2, Verizon Wireless, Bouygues Telecom, and Cingular Wireless, now the new AT&T, which today are announcing their support for Microsoft PlayReady.

“Microsoft PlayReady technology will be a key enabler for next-generation mobile content services. The validation process we are conducting will allow us to pioneer new service scenarios that work on both the mobile phone and consumers’ PCs,” said Cayetano Lluch, general manager of Technology and Services at Telefónica. “Demand for mobile media content is growing exponentially, and Microsoft PlayReady will help us deliver a tailored digital entertainment experience for our customers.”

“We believe Microsoft PlayReady technology will accelerate deployment this year of many services that carriers see as important for the next generation of wireless communications,” said Jim Ryan, vice president of data services at Cingular Wireless, now the new AT&T. “Microsoft’s digital media expertise and its balance between the needs of the carriers and the interest of consumers is a very positive step for the delivery of mobile entertainment.”

“Microsoft PlayReady technology will help accelerate deployment of our entertainment services, which we see growing in importance for consumers this year,” said Russ Shaw, director of Capability and Innovation at O2 UK. “Protecting content while keeping it easily accessible by consumers is a careful balance, and Microsoft’s digital media expertise and experience is critical to making this a reality.”

“We have thoroughly compared different DRM solutions that are offered in the market and decided to select Microsoft PlayReady technology for our next-generation mobile music services,” said Benoît Louvet, director of New Products and Services, Bouygues Telecom. “Microsoft PlayReady uniquely enables us to support a multitude of business scenarios targeting both the mobile phone and the end user’s PC.”

“Working closely with Microsoft has provided us with an advantage in the marketplace over the years, and added significantly to our customers’ experience in the multimedia world,” said Jim Straight, Verizon Wireless vice president of data services. “Microsoft PlayReady technology will help us usher in a new era of mobile digital media in a seamless, flexible manner that our consumers demand.”

Microsoft PlayReady technology will be available as a well-documented porting kit with source code, so it can be deployed on any mobile hardware or software platform, including low-end devices. Optimized implementations for several popular handset platforms will be available from PacketVideo in its software products for mobile phones.

“With the rapid growth of mobile content services, Microsoft PlayReady technology will quickly emerge as a mission-critical ingredient for new consumer applications because it combines greater flexibility for content and services with a rock-solid technology foundation,” said James C. Brailean, Ph.D., chief operating officer of PacketVideo. “Microsoft PlayReady will have an immediate positive impact on the mobile entertainment market. PacketVideo is partnering closely with Microsoft to include optimized implementations in our industry-leading media client applications for popular handset platforms so that operators and manufacturers can get to market quickly and cost-effectively.”

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.

1 Informa Telecoms & Media, December 2006

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

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