Chinese consumer electronics manufacturer Sichuan Changhong Electric Co. has announced that Microsoft Corp. will purchase $12.3 million worth of shares to become a strategic investor in the company. The firm further informed that it would work with the company to jointly develop entertainment products that can be accessed via the Internet. Shanghai-listed Changhong Electric has signed a letter of intent with Microsoft to sell about 15 million newly issued shares to the US software giant, it said in a statement to the Shanghai Stock Exchange.
Even though Microsoft has spread its net extensively in China’s software sector, building technology partnerships with half a dozen Chinese software developers, but the recent agreement to buy stakes in Changhong marked the first time it has made an equity investment in a hardware manufacturer. Sichuan province-based Sichuan Changhong, one of the biggest television makers in China, is now putting efforts to enter into producing an integrated digital media platform.
Both the companies are not new to each other as they had signed an agreement in June 2004 to set up a lab committed to the development of digital media tools connecting the three C-s: consumer electronics, computers and communications. Changhong has said that the equity investment from Microsoft, finalized on Friday, will be tied in with a joint project called Media Galaxy, intended at developing and bringing to market equipment to link flat-panel televisions to home computers and the Internet.
Earlier it was expected in Chinese market that Microsoft would buy around five percent stakes in the firm, however, Microsoft eventually settles with buying less than one percent, 0.8 percent. Chinese analysts still believe that the Redmond based software giant could increase its stake in the future.
Image Credit: pvrblog
