September: Microsoft sells networking gear. October: Microsoft issues fixes

Microsoft has released a software update to correct connection problems with network gear it unveiled in mid-September.

The fix could resolve problems in the company's 802.11b wireless, or Wi-Fi, and Ethernet hubs that either dropped connections with local computers or with ISPs. Users started reporting problems soon after the network gear appeared in US stores around 1 October.

The glitches are a bit of a black eye for Microsoft, as they reflect upon the company's expansion into an important new hardware category - home-networking gear. Microsoft unveiled 10 wired and wireless networking products, including hubs and USB adapters, in mid-September.

Rival Linksys has a commanding lead in the category, where analysts note that Microsoft's network gear is priced higher than competing products after mail-in rebates.

For the first nine months of the year, Linksys held a 57.8 per cent share of the market for network gear sold at US retail outlets, according to NPDTechworld. D-Link followed with 12.3 per cent, and NetGear captured the number three spot with 11 per cent. Belkin, with 6.9 per cent share, took the fourth position. Apple took the last of the top five spots with 3.5 per cent. NPDTechworld has not yet tabulated sales for October, which would be the first month to include Microsoft.

"It's good that they've been able to get the update out," said NPDTechworld analyst Stephen Baker. "It's unfortunate they had this problem. But it's not unexpected, because problems have devilled this category before."

Microsoft released an update to the firmware - that is, software coding that can be entered into programmable ROM - late Friday, in limited fashion through a newsgroup posting. The update was not available from the company's Broadband Networking website.

"Before we send this update to everyone, we would like those of you who have been having problems to try it and verify that it addresses the issues you have been seeing," wrote Neel Malik, a Microsoft program manager, in a Sunday night posting.

The update can be applied to four products: the MN-100 Wired Base Station, the MN-500 Wireless Base Station, MN-610 Wireless Desktop Kit and MN-620 Wireless Notebook Kit.
Over the weekend, Microsoft's broadband networking newsgroup was abuzz with chatter about the firmware update.

One poster said he had seen "no disconnects since the firmware upgrade". Another newsgroup poster said the update "seemed" to fix his connectivity problems but created another. The "MN-500 seems to reboot at random intervals", he wrote.

Many other posters reported trouble installing the update. One user noted that he had to install the firmware update over a wireless connection even though the installation instructions recommend against this method. If the connection were to drop during the firmware update, the hub could be rendered inoperable.

"I thought it was rather humorous to read the message... since I could not get it to work any other way, including using the update feature in the admin console," he wrote.

NPDTechworld's Baker said he expects Microsoft will likely get beyond the networking glitch without any permanent damage.

"I don't think there's going to be any long-range effects," he said. "Most of the companies in this category have had glitches the last couple of years. Besides, we're on the brink of this category exploding. People that come along later won't know about these problems."

Microsoft is betting on the delivery of digital content over the internet and the redistribution of that content over home networks to be the central driver behind the next wave of PC sales. The company released network gear to help facilitate broadband adoption, particularly using wireless.

The company also sees other important reasons for getting into the home networking market. Devices running its Windows Media Center, Windows XP Tablet PC Edition and Windows Media Player 9 Series software, and the forthcoming Mira 'smart displays', all benefit from wired or wireless network connections.

Microsoft also hopes the network gear will help the company woo subscribers to MSN 8, the latest version of its ISP software and service. The Redmond company, in fact, is offering a discount on network gear purchased by MSN broadband subscribers.

This month, Microsoft started to advertise its networking gear more aggressively on the web. New flash ads on MSN.com nearly fill the browser window with a splashy promotion for the network gear.

Joe Wilcox writes for CNET News.com.