Microsoft Corp. and Toshiba Corp. announced Monday they will jointly develop new-generation high-definition DVD players, concluding an agreement that strengthens their alliance in the wider area of technology for digital home electrical appliances.

The two firms will work on developing HD-DVD players using Microsoft Windows CE technology, they said at a Tokyo news conference attended by Microsoft Chairman Bill Gates.

They also plan to develop mobile PCs with the next version of the Windows operating system, code-named Longhorn, the two companies announced.