Windows Media Center, Take 2

Microsoft on Tuesday will launch an upgrade to its Windows XP Media Center to seize on growing demand for software that transforms PCs into home entertainment hubs.

Dubbed the 2004 edition despite the fact that it’s being released in 2003, the upgrade is the follow-up to the Media Center OS that debuted last year and found a place in dorm rooms and home offices where users wanted a desktop with old OS standbys, plus additional tools to manage digital TV, personal video recorder, music, photo and video content.

“It really does fit right in the sweet spot where PCs and consumer electronics intersect,” said David Smith, an analyst with IT research firm Gartner.

Yet while Microsoft and its vendor partners have claimed that the Media Center was generally well-received, uptake has been muted by complaints of bugs in the code. For example, some first-edition users complained one bug blocked the audio track from being recorded along with the video. In fact, some analysts cited this as a reason why Microsoft delayed its debut in international markets until this past summer.

With the upgrade, Microsoft raises the volume on its sales pitch (and the pressure on computing and consumer electronics rivals) as it lobbies tech-savvy home users that Media Center should be the brain of their living room entertainment system.

Thanks in part to a straightforward design accounts, a user screen (described by some as “Mac-like”) unlocks tools that might otherwise be buried deeper in the operating system strata. In addition, it’s run with a remote similar to a TV or stereo clicker — a device no consumer is intimidated by.

Microsoft is mum on specifics, not wanting to undermine launch events in New York, Redmond, Wash., and San Francisco. But industry watchers expect a number of upgrades, both from the software maker and its PC partners.

Most obvious to observers is that Microsoft will likely increase its list of 45 manufacturers shipping Media Center, and that those companies will introduce products that look more at home in the living room — wide aspect, TV-line screens for example.

Existing partners, including Toshiba, Gateway and Hewlett Packard
, are eager for Tuesday’s release, viewing it as an unofficial kickoff of the holiday season as they did last year. Also not out of the question is an alliance with a large consumer electronics maker which would head off a costly competitive battle and expand distribution channels for both.

Gateway began selling Media Center in mid-level machines last year, and has since moved it onto high- and low-end end PCs. One model sells for $999, several hundred dollar less than last year. The company wouldn’t say how many its sold.

“For a lot of users it’s a second PC,” said Philip Osako, Gateway’s vice president of alternative form factor desktops. “These people are savvy. They want to share content between them. They have wireless home networks.”

Previously, Microsoft has talked of concurrent-user technology, which would allow two family members to use Media Center at once — for instance, one could use the PC for games or e-mail while another accesses PVR capablities through the TV. The option could be appealing to home users, and Microsoft has likely made progress on it, but it’s unlikely to be ready for this upgrade.

The idea of a PC-based home entertainment systems, is a selling point for retailers, especially since the next Microsoft operating system, dubbed Longhorn, isn’t expected to be widely shipping until 2006.

“The PC makers need a consumer OS refresh. They need to give consumers a reason to go out and buy new PCs, more than just digital media, music andmovies,” said Joe Wilcox, an analyst with Jupiter Research (owned by the same parent as this Web site). “Because Media Center is very entertainment-focused it delivers what the PC makers need right now.”

Another factor could help sales this year, Wilcox said. In 2000, there was a huge spike in PC sales, due, in part, to Internet rebates.

“Now that those three-year commitments are expiring, it’s a good time for many of those people who bought those low cost PCs to ungrade to a ‘real’ PC,” Wilcox said. “Media Center might be just the ticket, considering the huge interest in home theater entertainment.”

But while engineers worked out the kinks in the code, Microsoft’s consumer electronics game plan has faced an influx of new competitors. In addition, the explosion of wireless home networks and arrival of new digital media devices have raised the bar for Microsoft in the consumer space.

When Dell last week formally entered the consumer electronics realm, it also unveiled its Dell Media Experience proprietary software built on top of Windows XP Home and Professional, not the Media Center edition. Sony has long sought to marry its computing and home entertainment platforms with early adoption of 1394 ports and its own video-editing and DVD burning software.

And Media Center faces competition from SnapStream Media, which makes software to convert the PC to a media center, supporting remote control and video pause and record. It doesn’t play CDs and DVDs. Even ATI’s line of TV cards can be seen as competitive in nature.

Gartner’s Smith said competitors do offer pieces of the Media Center functionality.

“You can go out and by pieces yourself,” Smith said. “You can get a TV tuner card and other components. But Microsoft lets you plug it in and turn it on.”

Additionally, falling prices for Media Center PCs should also make the option of acquiring the software in piecemeal, less attractive, Smith said.

Still, heavy-hitters are looking to carve their own niche in the consumer market even though they won’t compete directly with Microsoft.

Last week, Dell, said it is adding flat-panel LCD TVs and digital music players to its line-up of offerings. (Parts of this push may overlap with Microsoft but Dell didn’t announce all details of its plan.)

Before that, enterprise networking giant Cisco Systems ponied up $500 million for Linksys, a maker of wireless home networkinggear. Motorola’s broadband unit has also been focused on home entertainment, for example set-top boxes that deliver video-on-demand and other advanced features.

So the industry is geared up for the living room PC. Now, it’ll come down to whether Microsoft and its partners have designed software and hardware well enough to convince consumers that they should be too.

— Thor Olavsrud contributed to this report.

News Around the Web