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PC/TV Convergence Gets Jump Start From Media Center PCs
For years industry prognosticators have heralded the age of PC/TV convergence, where computer and television technologies combine into one central system offering new levels of passive and interactive entertainment. Manufacturers from both the PC and consumer electronics industries have grappled with the problem, delivering a variety of devices aimed at simplifying the interactive TV experience, while reducing prices, but sales remain small relative to sales of dedicated TVs and PCs. That may have started to change during the last two years, when a new class of so-called media center PCs arrived, bringing PCs designed specifically for the living room home entertainment experience. Media Center PCs Grow Because these systems employ large-capacity hard drives, they can perform personal video recording services. Additionally, many TV/PCs incorporate NTSC and digital ATSC tuner cards that enable viewers to receive off-air broadcasts for playback on a connected TV monitor. As the home networking concept grows, this approach is expected to become more common because the PC can be adapted to serve as a central server, distributing audio, video and computer functions to terminals in various rooms of a home. The so-called Media Center PC was launched as a collaboration between PC manufacturers and PC software giant Microsoft, which developed a home-entertainment centric edition of its popular Windows XP PC operating system (OS). The latest iteration of the OS – Microsoft Windows Media Center Edition (MCE) – comes pre-installed on a PC with a specific set of hardware features. Like other Windows XP PCs, the OS will allow playing music, videos and slide shows, but a Media Center PC also has both a standard video-out jack on top of its VGA connector, a TV tuner and an infrared remote. The PC performs all the functions of a typical Windows XP PC, but when using the handheld remote Windows' pop-up menus and icons are replaced by a streamlined interface that can be read easily from anywhere in the room. Commands can be activated with four directional buttons and a central "OK" button. Media Centers PCscan tune TV channels like a set-top box and record programs like a PVR, in addition to playing back digital image and music files, and browsing the Internet. Prices have come down to a level about $100 higher than conventional PCs. From the start, vendors weren’t quite sure whether MCEs would end up residing in the living room or home office. While some designed units with horizontal cabinet designs that looked like home theater components, others continued to build PC towers. In 2006 a number of vendors were planning to offer MCEs in both configurations. In 2005, the surveys revealed that a majority of MCEs were not being used as multimedia hubs, but for other features, including good digital imaging and music management capabilities. As a result, Microsoft lowered the price of the MCE OS as it tried to position it as a mainstream operating system. Although it is not likely to fully supplant XP at this time, consumers opted in greater numbers to purchase lower priced MCEs that omitted TV tuners and digital video recording capabilities. According to data from market researcher NPD Group, during the first ten months of 2005 about 901,000 MCE-equipped computers were sold, compared with 210,000 during the same period a year earlier. One solution around using a PC to deliver PC-like applications to a TV is the set-top Internet-access device. Most of these set-top boxes contain powerful CPUs, RAM, a modem, parallel and/or serial ports, small capacity operating systems, flash ROM (where the operating system often is stored), an optional hard drive, built-in browser and/or software package, which includes e-mail capacity. Designed for ease-of-use, these devices allow consumers a relatively inexpensive means of accessing e-mail and browsing the Web on their TV screens, without the expense and hassle of using a PC. These products provide Internet content that can be viewed clearly on TV screens. In some cases the set-top device accesses the Internet through a specific Internet service, carrying a monthly subscription fee, typically running around $20 per month. Other units are designed to be Internet service provider (ISP) agnostic, meaning the user can shop for a third-party ISP, such as the one used for a desktop PC account. Presented as Internet access for PC-phobic consumers, the concept thus has far failed to sustain a consistent following, and some key developers and manufacturers disappeared or were acquired by larger ISPs. Despite significant hype and advertising that greeted the launch of set-top Internet TV devices, sales have been disappointing. According to CEA Market Research, 2006 sales of set-top Internet access devices are expected to decline to 126,000 units, while factory dollar volume declines from $14 million to $11 million. The average price of a set-top Internet access device is projected to drop from $95 to $87 in 2005, CEA reported.
Source: CEA Market Research |
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