December 14, 2006 4:00 AM PST

Intel's Viiv low on holiday shopping lists

Almost a year after Intel announced plans to make your PC look like a TV, the company is still searching for the play button.

Intel's Viiv (rhymes with five) was supposed to make it easy to place a PC at the center of your digital living room. Last year at the Consumer Electronics Show, company executives promised that a content revolution was at hand, claiming consumers were ready to unleash themselves from pedestrian cable and satellite providers to embrace a new model that took advantage of the processing power of the PC and the increasing number of broadband Internet connections.

The basic idea was a clone of Intel's Centrino strategy: put a colorful sticker on a PC, get PC makers to put a combination of Intel-developed technology inside the PC and reward them with marketing assistance, then blast the airwaves with snappy messages promoting the product.

But Centrino took a technology concept that both businesses and consumers were starting to embrace--wireless networking--and made it easier for average PC buyers to understand. In Viiv's case, Intel and its partners are trying get people to use PCs in very different ways while wading into a new world of on-demand content delivery that is still challenging even for established cable and satellite companies.

Intel and its PC partners are moving a bunch of Viiv-equipped PCs, but it doesn't appear that consumers are making Viiv a priority as they shop for PCs this holiday season, or that they even know what it means, let alone how to pronounce it. Company insiders admit Viiv has fallen short of expectations even as Intel starts to get a little more momentum with content deals from household names like NBC and a growing number of certified devices.

Package deal
Viiv is all about making a PC the central device within a digital entertainment system. Viiv PCs are designed to store digital content, access exclusive content from the Internet, and stream that content to televisions within a home over a protected network. Intel's partners build Viiv PCs with a specified list of components that the chipmaker says are durable enough to stand up to the processing requirements of the digital entertainment experience, along with software designed to make this all a snap for the average PC user. Add to it a network of content deals with companies like AOL, NBC and Yahoo, and suddenly a Viiv PC looks an awful lot like a set-top box and on-demand television service from companies like Comcast or DirectTV.

Of course, Viiv PCs can do a lot more than a set-top box. A Viiv PC offers huge amounts of storage, the ability to organize photos and DVDs, DVR (digital video recorder) functionality, and a gateway to the Internet. But according to Current Analysis, only 13 percent of PCs with Microsoft's Windows Media Center Edition--a component of the Viiv platform--are sold at U.S. retail with even a single TV tuner, let alone dual tuners that allow people to record one show while watching another. This makes it much more difficult for consumers to use a Viiv PC as part of their home entertainment package and relegating it to a secondary role in the living room.

"These machines (without a TV tuner) are not the best digital entertainment devices to build a home entertainment system around," John Spooner, an analyst with Technology Business Research, wrote in an e-mail. "They're also quite expensive versus even the top-end traditional desktop with (Microsoft's Windows) Media Center."

There just hasn't been as much interest as the PC industry had thought, or hoped, in the idea of a living room PC. Some specialty PC makers have been experimenting with stylish designs bearing a Viiv sticker that resemble traditional consumer electronics equipment, but there hasn't been much appetite for those types of systems among mainstream PC buyers, and Dell and Hewlett-Packard don't even offer any of the so-called "entertainment PC" styles.

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Intel Viiv, home entertainment, satellite company, Intel, on-demand

 

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