Microsoft, Harmonic Team for IPTV

CHICAGO -- Microsoft Corp. (Nasdaq: MSFT) and Harmonic Inc. (Nasdaq: HLIT) today announced they are jointly working to deliver an integrated Internet protocol (IP) based video solution encompassing the Microsoft TV IPTV Edition software platform and Harmonic's industry-leading DiviCom encoding solutions. The integration, which represents one of the first real-time IPTV solutions for both SMPTE VC-1 and MPEG-4 AVC (H.264), enables broadband service providers to offer feature-rich, broadcast-quality video services at ultra-low bit-rates. The collaboration - formalised through a Development Cooperation Agreement - is expected to speed service deployments while reducing technical risk, and to facilitate the growth of the emerging IPTV market. The agreement allows for the continued integration and interoperability testing of the two companies' solutions using the DiviCom MV 100 multi-codec real-time compression platform.

The collaboration between Microsoft and Harmonic will benefit telcos and other communication service providers seeking to extend their customer relationships by provisioning a compelling suite of broadcast and on-demand services over bandwidth-sensitive networks. By providing a comprehensive solution for transmitting high-quality video services at very low bit-rates, the two companies further facilitate the delivery of competitive TV services over xDSL and other IP-based networks. This new agreement builds on a relationship initiated in September 2003 to promote the Windows Media 9 Series codec - now known through the SMPTE standardisation process as VC-1 - for broadcast-grade video services on Harmonic's DiviCom MV 100 encoding platform.

As part of the collaboration agreement, Harmonic will support important new IPTV features such as a mosaic program guide and picture-in-picture viewing. Supporting such features and capabilities at the head-end rather than at the edge application server will result in a superior viewing experience with faster processing and better overall picture quality.

"High-quality, real-time VC-1 and AVC encoding is a critical component in the end-to-end delivery of IPTV services from Microsoft TV," said Phil Corman, director of worldwide partner development of the Microsoft TV Division at Microsoft Corp. "Harmonic's advanced encoding capability and video-over-IP expertise, combined with our robust IPTV software platform, make it possible for operators to use IP-based networks to deliver a range of next-generation television services and a viewing experience that is second to none. This is a critical requirement for growing the IPTV subscriber base."

"The expansion of the relationship between Microsoft and Harmonic is a very significant step in the evolution of commercially viable IPTV and broadband video services," said David Price, Vice President of Business Development for the Convergent Systems Division of Harmonic Inc. "Broadband operators can now overcome existing bandwidth limitations to offer a competitive TV service with compelling viewing features and more channels of high-quality video. We expect this to be a welcome development from both new and existing customers, and should serve to accelerate the roll-out of IP-based television services."

Microsoft Corp.

Harmonic Inc.