PCs Invade The Living RoomPCs Invade The Living Room

Computer vendors are hoping Santa will be leaving lots of Media Center PCs under the tree this year. With the release last month of Microsoft Windows XP Media Center Edition (MCE) 2005, vendors are upgrading their Media Center PCs for the holidays. Among the companies with desktop models are Dell, Gateway, Hewlett-Packard, and Sony. Toshiba, for its part, has two notebook versions. Other companies like Pinnacle Systems sell adapters that convert existing PCs into a rough equivalent of the Media Center platform.

Media centers can access not only TV broadcasts and cablecasts, but also record them on the PC's hard disk, similar to a personal video recorder (PVR) like TiVo or ReplayTV. The machines also give users streamlined access to their digital photos and music collections, with cataloging features and slide shows, and a wireless remote control for accessing all the capabilities from the comfort of a living room couch. The latest version of MCE includes multi-tuner support, so users can record one or two programs while watching another, support for digital and high-definition TV programming, and CD and DVD burning.

Buying But Not Sharing
However, even with these new features, it's not clear if the latest version of MCE is going to make an impact on most customers' usage patterns, or if they will sell much better. Only about a million units have sold so far in the two previous iterations of MCE since the platform was introduced in 2002.

"People are buying these media center equipped PCs, but not using them," notes Ted Schadler, principal analyst at Forrester Research, a research firm based in Cambridge, Mass. "We ask people what they do in their home networks and virtually none of them share photos, music, or TV. They mostly use them to share Internet access."

To encourage more people to buy the products, Microsoft and Intel have jointly launched a marketing campaign called Digital Joy that is meant to educate consumers about what they can do with their PCs for entertainment, including television, music, and photos. Once again, they are playing catch-up with Apple.

"Over the long haul, it is clearly a platform to distribute music and photos around the home, take your music library off your PC, and play it on your stereo," says Schadler. "But you can already do that with Apple AirPort Express, which is a standout for distributing music."

Dell is appealing to both TV watchers and TV neglecters by selling Media Center PCs with and without TV tuners. The company now sells three media center PCs -- the Dimension 3000, Dimension 8400, and Dimension XPS Gen-3 -- but plans to offer the platform across its Dimension product line by the end of next year, according to Dell communications specialist Liem Nguyen. The Dell Dimension 3000 starts at $493, while the high-end XPS system costs about $1600. Dell also offers Windows XP Media Center Edition as a $39 optional upgrade for customers from Windows XP Home Edition.

"They don't have to purchase a media center," says Nguyen, "but they can still use the media center interface to access digital media, whether it's photos or music."

Dell also enables customers to access its media center PC from another remote TV in the same house by reselling the Linksys Media Center Extender. The thin-client set-top box can fit into a stereo rack. Customers can run productivity applications or do photo editing with the media center in their home office or den, while streaming recorded TV or sharing photos in the living room through an extender connected to the TV. Customers can also use a wireless router to share content through a wireless connection to the extender.

"One person can be watching a movie on the PC and someone else can be watching the same movie at a different point at the same time," says Nguyen.

Gateway's media center PCs rely on the Intel BTX chassis, whose larger, slower-speed fans allow them to run cooler and quieter so they can be placed in a family room or studio apartment without producing extra noise and heat. Last month, Gateway introduced the Gateway 820GM Media Center PC, its first media center PC available for sale through the retail channel. The $1,249.99 machine has a built-in TV tuner that can act as a personal video recorder. It can also function as an FM radio, DVD burner/player, and CD player. This week, Gateway is announcing two new media center PCs for direct sale: the entry-level Gateway 3250X Media Center PC for $799.99 (without the TV tuner/FM radio card, which costs an extra $100) and the higher-end Gateway 7200S Media Center PC for $1,399.99. The 7200S model includes a dual-layer DVD burner that offers doubles the storage capacity if double-sided DVD discs are used, along with 72-channel high-definition audio.

Prices Decline
The price of media center PCs is declining, points out Rick Schwartz, senior product planner, desktops, in Gateway's consumer direct division. "If we look at last year, most media center PCs were substantially over a thousand dollars," he says. "Now we're seeing products as low as $799. That is going to drive a lot more volume. At this point you're not really paying a price premium anymore. A lot more of the mass market will consider them than in the past."

Schwartz expects the $799 price point to do very well this holiday season, even though the TV tuner costs extra and only works with analog cable signals. Many of today's media center PCs still have trouble functioning with high-definition and digital TV, according to Schwartz, even though MCE 2005 is supposed to support these technologies.

Gateway wants to make MCE an upgrade on as many of its products as possible to make it easy for customers to add to their systems. Schwartz notes that Gateway is not charging a premium for the Media Center OS, and it is effectively a free upgrade.

Back in 2002, Hewlett-Packard was the first company to launch a media center PC based on MCE. Today, HP is offering two kinds of media centers: one that comes as a desktop PC and another meant to seem more like a hi-fi component for the living room. The HP Media Center PC has the desktop form factor, while the HP Digital Entertainment Center fits into a stereo AV rack. "The heart of it is a PC, but it's not a traditional desktop PC," says Tom Markworth, product marketing manager at HP's North America consumer computing division.

HP is targeting the HP Media Center PC primarily at high-end power users of multimedia content creation applications, especially people doing extensive video editing, digital photography, downloading of digital music, and burning of dual-layer DVDs in their home offices, and the machine features a high-speed 3.40GHz Pentium 4 processor.

The Digital Entertainment Center is aimed more at people who just want to enjoy their digital entertainment in the living room. The software has been designed for use with a remote control rather than desktop software using a mouse. The Digital Entertainment Center also offers several RCA jacks for connecting analog surround sound speakers, and five different ways to connect to a television and stereo system.

"The Digital Entertainment Center looks more like a stereo receiver or a DVD player than a computer," says Markworth. Like Dell, HP also sells a Media Center Extender, which extends the MCE interface to TVs in other rooms.

Sony is also in the media center PC game with its RA and RS series of VAIO desktops. RA is the premium series of Sony VAIOs, according to Todd Titera, Sony's desktop product manager, and includes the full Windows XP MCE OS. RA series systems cost $1000 and up.

"It ties right in with our strategy around personal multimedia content," says Titera. The TV tuner card comes with the higher-end systems and was developed by Sony to take advantage of MCE's PVR software. It has the capability of importing analog content from a camcorder and can output content to a DVD and onto the network. The Sony-developed TV tuner also leverages some of the technology behind the company's WEGA line of flat-screen TVs and brings it to PC customers.

Sony also includes its TV card in the RS series. The RS series, starting at $799.99, does not run the MCE version of XP, but instead relies on Windows XP Home Edition, along with Giga Pocket, Sony's own PVR software for recording and burning TV content to disk and watching it anytime. With both the RA and RS lines of Vaio desktops, Sony leveraged its strength in music, incorporating SonicStage Mastering Studio software from the Sony Oxford Labs, which makes high-end mastering consoles used by professional musicians.

Sony and other PC makers are hoping this latest generation of Media Center computers will have the right combination of features to entice customers to consider their PCs a source of entertainment " and buy the necessary equipment. In the competition between the PC and the TV, they're hoping the PC will win a place in the living room.