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.”

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.”