January 16, 2007 4:00 AM PST

Apple, Microsoft have designs on your living room

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Microsoft and Apple are far from the only players here. There are content providers--DirecTV, the Dish Network and the cable companies--offering their own, more powerful set-top boxes and services to consumers. Telecommunications companies are also getting into Internet-based TV (though this is another area for Microsoft, which has signed a number of customers and has been working in the area for more than a decade).

Notably, TiVo has added a variety of abilities to its popular digital video recording system in recent years, allowing content to move to other PCs and devices. This week, it finally brought that TiVoToGo mobile service option to the Mac.

And Digeo, which counts Microsoft co-founder Paul Allen among its investors, has been trying to crack this market for a long time. Years of selling its Moxi line of set-top boxes to cable companies has brought only limited results, though: about 400,000 people have signed up through smaller cable outlets. At CES, Digeo said that it will start selling its devices directly to consumers. It also offered a preview of two high-definition personal video recorders that it plans to release in the second half of this year.

A key reason for this shift to the consumer is a long-planned change in the cable industry that will allow people to buy rather than rent DVRs. People will be able to purchase their own set-top box at a retail stores, then hook it up to their local cable provider via a small insert, knows as a CableCard.

Microsoft has been touting plans for CableCard support for a long time. In November 2005, the company said it had signed a deal with the cable industry that would pave the way for Media Center PCs with built-in CableCards to arrive by the 2006 holiday sales season. That didn't happen. At CES last week, Microsoft said it sees such PCs coming out in the second half of this year.

Electronic ease of use
The big challenge the computer companies face, said Digeo CEO Mike Fidler, is not the technical one but that of making products that are as easy to use as the consumer electronics they seek to usurp.

Fidler, who spent nine years as head of Sony's home products unit, said people expect more out of their TVs than they do from a PC.

"It doesn't have a 'blue screen of death,'" he said. "It has always been, 'I turn it on. I turn it off.'"

The hurdle for Digeo and others now is to maintain that ease of use and reliability while adding options such as direct delivery of digital content, and streaming of music and pictures stored elsewhere in the home. People want those things, but they want them to be easy to use, he said.

"They don't want to have to stress out in their living room trying to find their entertainment," Fidler said.

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