Microsoft's New Gig for PCs: Entertainer

Microsoft (MSFT ) has long lusted after your living room. Facing a largely saturated market for PCs, the company sees the convergence of computing and entertainment as an opportunity to reignite its growth. The software maker has achieved some success with the Xbox game console, but the big prize is music, movies, and television.

So far, Microsoft's frontal assault on the TV set hasn't fared well. Its WebTV and Ultimate TV products--which combined Internet access, television, and a crude form of interactive TV boxes--were both busts. Technical difficulties and resistance by cable operators to doing business with Microsoft has kept the software giant out of the set-top box business.

Microsoft's newest effort, the Media Center PC, to be launched this fall by Hewlett-Packard in North America and Samsung in South Korea, may be a smarter flank attack on the TV. Although it may find a place in the living room, the Media Center PC is aimed at bedrooms, dorms, dens, or anywhere else that a PC can double as a television, video recorder, music player, or photo viewer.

The heart of the system is a new version of Windows called XP Media Center Edition, which will be pre-installed on only high-end PCs. Media Center doubles as a PC and as an entertainment center, featuring a television tuner with online program guide, a video recorder that stores shows on the hard disk, DVD player, music player, and photo viewer.

None of these capacities is new for a PC, and most are based on existing Windows components, such as Media Player. What Microsoft has done is wrap them in software that, at the click of a button, switches from a Windows display designed to be used from about 18 inches away using a keyboard and mouse to a TV-like display run from a couch across the room via remote control. I tried it and found it easy to use, even with a cobbled-together remote that wasn't nearly as slick as the final product will be.

HP'S version, which will be available later this fall, features a black-and-chrome case that looks more like a stereo than a PC. It will come with a DVD burner and slots for memory cards from virtually any digital camera. While specs are not yet final, it will feature a fast Pentium 4 processor and 100 gigabytes or more of hard-disk storage. The target price is around $1,500.

Microsoft and HP see the Media Center PC as a niche product aimed at college students or others who want a high-quality entertainment center in a confined space. The design will output video to a standard TV, and even cheap TV sets provide better pictures than much more expensive computer monitors. But using a separate TV defeats the space-saving idea.

Microsoft may have more interesting things in mind, especially if it marries Media Center PC with a technology code-named Mira. Mira allows you to log into a Windows XP computer from a much simpler and less expensive remote device. In the future, Mira, a version of the Windows CE.Net operating software, could be built directly into a TV set that is connected to a PC by a home network. The PC, which might be anywhere in the house, could record TV shows, grab videos off the Web, and store music and pictures, any of which could be piped wirelessly to a TV or stereo.

Of course, Microsoft is not the only player thinking this way. The leading set-top box makers, Motorola (MOT ) and Scientific-Atlanta (SFA ), have licensed Moxi Media Center technology from Digeo, which offers many of the same features. Toshiba has been selling its version of a networked home entertainment server in Japan. And Sony Electronics (SNE ), which has incorporated a number of Media Center-like features into its Vaio desktop PCs, is thinking along the same lines. Perhaps the long-awaited convergence of PCs and entertainment will bring us what the PC market has lacked--some real competition.


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