Audio-video player to sport phone

A Taiwanese electronics maker plans this year to begin selling a portable device that's half digital audio-video player and half cell phone.

"Movie playback is one of our major targets with this device," said Rick Lei, general manager of sales at Benq, which spun off from computer giant Acer a year ago to concentrate on high-tech consumer products.

The device will sport Microsoft's as-yet-unreleased Media To Go operating system. The OS is designed for multimedia on mobile devices, said Lei, and is a good fit for Benq's upcoming product.

He added that their engineers in Taiwan are working with Microsoft to ensure that the device can play stored music, photos and movies, compressed in formats such as MPEG-4.

Peer-to-peer file-sharing services such as Kazaa have been explosively popular in the past year, with millions of users downloading MP3 music, movies or TV shows into PCs. Each movie typically consumes around 1 gigabyte of hard drive space.

The as-yet-unnamed Benq multimedia player/phone will sport a 10GB or 20GB hard disk of the 1.8-inch variety made by Toshiba or Hitachi--the same type found in Apple Computer's iPod.

When launched in August or September, the device will cost $399 for the 10GB version and $499 for the 20GB version.

Since Benq spun off from Acer, it has had to compete with rivals such as Sony and Samsung, which like Benq sell both IT and consumer products, with some of them blurring the line between the two worlds.

CNETAsia's John Lui reported from Singapore.