Laptops Key to Microsoft Media Center

Microsoft’s latest
refresh
of its Windows XP Media Center this week uses the PC as the
brain of the entertainment center, but even the experts are saying it’s
really laptops that will drive this train.

The Redmond, Wash.-based software giant Tuesday said more than 40
original equipment manufacturers (OEM) around the world will begin shipping
its Media Center Edition 2004 PCs to consumers in Asia, Canada, Europe and
the United States including Dell, Fujitsu, Fujitsu Siemens, Gateway,
Hitachi, Hewlett-Packard, NEC, Samsung, Sony and Toshiba. A majority of the
vendors say they will offer laptops as a primary option for consumers.
Besides Media Center Edition 2004 software, the only other common thread is
an Intel processor powering it.

For example, in tandem with the Microsoft announcement, rivals HP and Dell took the wraps off of their
high-speed desktops.

The Palo Alto, Calif.-based computer and printer maker unveiled its HP
Media Center zd7000 notebook with wide screen and expanded keyboard with
separate numeric keypad. The USD$1,799 (after a $100 mail-in rebate)
portable features an Intel Pentium 4 processor with Hyper-Threading
Technology ranging up to 3.2-gigahertz and an 800-megahertz system bus; up
to 2 gigabytes DDR SDRAM memory; up to an 80-gigabyte 5,400 r.p.m. hard
drive; and optional DVD+RW/CD-RW combo drives available on
configure-to-order models. HP also released three traditional PC designs: HP
Media Center m390n, m380n and m370n.

The Round Rock, Texas-based computer maker is offering built-to-order
desktop Dimension PCs in 4600, 4600C, and 8300 configurations starting at
USD$999.

The Dimension 4600C system comes with a 2.6GHz Pentium 4 processor with
Hyper-Threading technology, 256MB RAM, the new 64MB ATI ALL-IN-Wonder 9000
TV tuner card, 40GB hard drive, DVD player, a 15″ flat panel monitor,
Microsoft Windows XP Media Center Edition 2004 and a remote control with an
IR receiver.

So how significant of a roll are the media desktops playing in
Microsoft’s plans?

“It’s quite significant,” said Jupiter Research senior analyst Avi Greengart. “Notebooks are becoming
an increasingly larger share of the PC market as a whole, even in the
consumer space. In my report Consumer PCs and Digital Entertainment, we
have data on where in the home consumers have PCs; it isn’t just in the home
office or den anymore. Combine the trend of multiple PCs throughout the
home with home Wi-Fi networks, and now an entertainment-centric notebook can
bring all this rich digital content even further into new areas of the home.
The content also becomes portable for family or business travel.”

Notebooks are now the desktop purchase of choice, according to recent
findings from The NPD Group. In May 2003, researchers found the dollar sales
of notebook computers surpassed the dollar sales of desktop computers in
U.S. for the first time.

Retail computer product sales posted their best year-over-year sales
results in nearly four years, jumping 13.6 percent over May 2002 to nearly
$500 million. Laptops accounted for 54 percent of the share — more that
double January 2000’s sales volume of 25 percent. Unit volumes also set a
record in May 2003 as notebooks accounted for more than 40 percent of sales.

“May results were driven by consumers’ desire for mobility, combined with
aggressive pricing and robust configurations,” said Stephen Baker, director
of industry analysis for The NPD Group said in July. “Selling prices fell
below $1300 for the first time ever, more than $250 below May 2002 even
while 80 percent of notebooks sported 15 inch screens and 86 percent
provided customers with a CD burner.”

Another factor in notebook sales, say analysts, may be the viewing
screens. May marked another milestone when LCD monitors generated more unit
sales volume than standard tube-based CRTs.

LCD sales volumes have been steadily rising since flat panel screens
became affordable for consumers approximately two years ago. Flat panel
monitors accounted for 52 percent of unit sales in May and more than 70
percent of sales dollars. These numbers are in stark contrast to May 2002
when unit volumes was only 22 percent of total monitor sales and revenue for
LCDs was only 40 percent of the total.

CyberAtlas editor Robyn Greenspan contributed to this
report. CyberAtlas and Jupiter Research are owned by Jupitermedia, parent company of this
Web site.

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