WebTV Networks has added two hardware partners and now gives subscribers a choice of Internet service providers, but retailers report that sales of the set-top boxes remain slow.

The Palo Alto, Calif.-based WebTV, which in April agreed to be acquired by Microsoft, announced at E3 here that Mitsubishi and Hitachi will bring set-top browsers using WebTV's architecture to retail this fall.

WebTV announced a software upgrade that, for the first time, allows browser users to choose an ISP other than WebTV. The upgrade, which WebTV began offering free to its estimated 85,000 subscribers on June 17, allows customers to select an ISP from a WebTV-compatible list, according to Chip Herman, vice president of marketing.

Under the upgrade's OpenISP component, subscribers who choose an alternative ISP must pay WebTV $9.95 per month in addition to their ISP charges, said Herman. Subscribers who choose WebTV as their ISP will continue to pay $19.95 per month.

Herman said he expected that by the end of June, 90 percent of subscribers would have downloaded the upgrade, which also offers a printing capability, an online edition of TV Guide and better transaction encryption.

The number of WebTV subscribers has increased by 50 percent since April 1, said Herman, but retailers report that sales of Web browsers manufactured by Sony and Philips Electronics are flat.

Ron Risman, PC division manager for State Street Discount, Portsmouth, N.H., which sells the Sony browser, said sales were slow. "We saw a small boost when they dropped prices, but the product category is a niche to begin with," he said.

The Sony and Philips browsers carry suggested retail prices of about $249, reflecting a price cut made earlier this year, said Herman. Hitachi and Mitsubishi will use direct distribution models similar to Sony and Philips, he said.

Risman said as Mitsubishi, Hitachi and others bring new hardware to market, it could stir consumer interest. Still, he said, the browsers continue to face high consumer-education hurdles.

With the upgrade, consumers are able to print, addressing a wish-list item named by retailers. WebTV browsers will support printing to Hewlett-Packard 400 and 600 series printers with the addition of a Sony or Philips adapter. Sony's adapter should be on retail shelves in early July, said Herman. It has an expected street price of about $100. Philips' adapter will carry an ESP of $69 and will be on shelves in late July, Herman said.

Having invested more than $1 million in a retailer education program, WebTV will send trainers to 1,800 stores in June and July, Herman said.

Source: Computer Retail Week