MSN Companions in Stores

eMachines and Compaq have joined with Microsoft to launch the first MSN Companion devices. Compaq’s Home Internet Appliance IA-1, available since August, and eMachines’ MSN Companion, released last month, represent Microsoft’s latest venture into so-called Internet appliances. These machines, with less processing power than a traditional PC and no disk drives, are designed to be a cheap and easy way to get consumers online with Microsoft’s ISP service, MSN Internet Access.

Both MSN Companions run on Windows CE and come with the MSN Internet Access client software preinstalled and configured. Internet Explorer 4 is used for Web surfing, and a preconfigured Hotmail account eliminates the need for an onboard e-mail client or message storage.

Unlike WebTV, Microsoft’s set-top box that allows consumers to surf the Web and access e-mail from a TV, the MSN Companions use a more traditional PC display. The Home Internet Appliance comes with a flat panel display built into the unit, while eMachines’ MSN Companion works with any PC monitor (not included). The movement toward a PC-style display, in conjunction with rebates that greatly reduce the initial cost of purchase, could negatively impact the future of WebTV, and may be an indication that Microsoft is hedging its bets on the television-based platform. Subscriber numbers for WebTV have reportedly been stalled near the one million mark for the last year or so, and the company offered a free WebTV system to any new MSN subscriber in September in an attempt to boost its numbers.