When Hewlett-Packard showed us an early version of its $349 MediaSmart Connect digital media extender, our first reaction was, "It costs too much." Now that it's actually available, it appears the company has finally gotten the message. We're hearing from a source close to HP that the official price will drop to $299 in early October, and that "retailers are expected to offer instant rebates so consumers should find the product for around $249...maybe even lower."
Why the price cut? Remember that the Xbox 360 can duplicate much of the MediaSmart Connect's Windows Media Center functionality (albeit without built-in Wi-Fi, and with considerably more noise and shelf space). Recent price cuts have made the entry-level 360 as cheap as $199. The PS3 also has some impressive media streaming capabilities; it's more expensive at $400, but it's also got a built-in Blu-ray player (and, like the Xbox 360, it's a great gaming machine).
We're currently testing the MediaSmart Connect, and will have a full review soon. In the meantime, would you pay $250 or $300 for such a device? Or is the whole "digital media streaming" thing just another instance of the manufacturers trying to create a market where none really exists--do you actually want or need something that pulls your PC-based media files into the living room?