LOS ANGELES – The chairman and chief software architect of Microsoft Corp. wants to take the Windows XP Media Center PC to the masses.
So far the company has only sold one million units of the home entertainment operating system. Most of that came from Hewlett-Packard, which was one of the first
vendors to build specific Windows Media PCs since its initial launch back in 2001.
But Bill Gates acknowledged for the Windows Media PC to achieve broad distribution it will be through the system builder channel.
“”We are saying this next version we will take it up by a factor of four or five (four and five million units) and move it into the mainstream with our partners,”” Gates said.
Microsoft has developed a business model that is based on high volume for these partners, he said.
Partnerships
Microsoft has also partnered with Dell Corp., Toshiba Corp., Gateway Inc., and Sony Corp. to build not just desktop-based Media Centers but also portable Media Centers. But, Gates said he is banking on the more than 800,000 system builders worldwide to build Media Center PC products.
However, to move the Windows Media Center operating system into the mainstream all of the single devices such as TVs, PDAs, CD/DVD players, memory music players and cell phones have to work together.
“”It’s the magic of software,”” Gates said, during a presentation at the Shrine Auditorium. “”Software is the platform for system builders so they can build on it and take it to new directions where no one could have ever imagined.””
Gates demonstrated several devices during his hour-long presentation. One device, an AudioVox cell phone, will be able to play music by synching with the Windows Media Center library section to transfer music files, photos and even video.
Gates added that Pocket PC-based PDAs will shortly have this capability.
He also demonstrated memory music players from D-Link, Roku and OmniFI. These devices store MP3 or Windows Media file songs for playback anywhere in a home, even the garage.
Microsoft also launched the Playforsure logo for retailers of digital content as an assurance the format is ready for these Windows Media Center devices.
Still, there are some stumbling blocks to this vision, Gates said. Video, he said, is not where music and photos are right now.
“”The vision has to go beyond music to include photos and video,”” he said. “”Digital music and photos are exploding with rich content and delivery. Video is a tough, though. TV broadcast still is mostly analogue. Some of the new stations are digital and the satellite stations are all digital. Video today is where photos and music was four years ago.””
Gates sited this example: Through broadband connections people can download a compressed movie in 14 minutes on average. Four years ago that was a music file.
“”We have to make it easier,”” he added. With the Windows Media Center 2005 Edition users can mix video with music and photos together to create a slide show with music in the background.
Previously the Media Center came with only one tuner for video. The new version will have support many, including HDTV.
Another new area for the Windows Media Center is extender boxes allowing up to five Media Center areas in a home. The extenders will be sold separately or with an Xbox with an Extender kit.
Content will also be part of the new Media Center. Gates brought on stage singer/actress Queen Latifah for one demo where she showed the billionaire how to purchase a Lil’ Mo tune for $0.99.
CinemaNow
Services such as CinemaNow, Kodak Ofoto, Audible.com, Napster, MovieLink, and MSN Music, MSNTV Today, will be available for Media Center PC users.
Gates also launched the Windows Marketplace on www.windowsmarketplace.com, where more than 93,000 products from digital photography, to gardening to graphic design, to knitting can be purchased.
Supercom Canada’s Dixon Low, who attend the Los Angeles launch said that 2005 edition of the Windows XP Media Center will address all markets now that Microsoft has released the Extenders.
“”We want to be in this game and Touch is our main line for the Media Center,”” said Low, who is the district sales manager for the Markham, Ont.-based distributor.
Low said Media Center PCs have not sold in huge numbers at Supercom. A lot of dealers were interested in the product, but the customers were not ready for a unit to be in their living rooms, he said.
Supercom will be offering Media Center for private label PCs, their own Touch desktop line and notebooks.
Low believes those integrators who resell Media Center with home theatres can earn 20 per cent or higher margins, while the volume players can still net 10 to 15 per cent.
“”A lot of people look at the traditional PC as a box. But, we have machines that look like stereo equipment. Those look better and have a sharper look and they belong on the A/V shelf instead of the floor. No one wanted a beige or even a black box in their living rooms,”” Low said.
Frankie Wong, president of Elco Systems, said the difference between the 2005 Media Center edition and previous versions was unbelievable.
Previously low sales
However, resellers may encounter supply problems of TV tuner cards because some have an AM tuner while others do not.
But, he agreed with Low’s margin assessment saying at the high end resellers or home integrators can make 20 per cent margins or more especially if they bundle products with a solution similar to the Intel digital home concept (see Pushing the digital home, CDN Oct. 1, 2004 issue, page 12).
Wong also has not done huge numbers of Media Center PCs. In fact, he said Elco has only sold 15, but he believes with this new version those numbers could increase to thousands per month.
“”It depends on how the resellers promotes it to the customer. This is not a PC. You have to know how to sell this to the average consumer,”” Wong said.
Wong added that currently there are not enough resellers specializing in the home market. He plans to do road shows starting next year to build awareness of this market in the channel.
