July 16, 2002 4:00 AM PDT

Microsoft reveals media XP details

Microsoft on Tuesday gave an official name to an upcoming version of Windows XP that aims to make the PC a permanent part of the home entertainment center.

Originally code-named Freestyle, this entertainment version of Windows--which will go by the name Windows XP Media Center Edition--will appear on new PCs and PC hybrids in time for the holidays, the company revealed on Tuesday. With Windows Media Center, consumers will be able to use a TV remote control to catalog songs, videos and pictures, as well as check TV listings.

Windows Media Center brings the number of XP versions to five. The others are Home, for standard consumer PCs; Professional, for businesses; Tablet PC, for tablet devices and notebooks; and an embedded version for other devices. Earlier this year, Chairman Bill Gates said that selling customized versions of Windows, as requested by nine states pursuing the antitrust case against Microsoft, would confuse customers.

Microsoft unveiled Freestyle, which promised to unlock the operating system's digital media features via a remote control and new user interface, during the Consumer Electronics Show in January.

But digital media aficionados and other consumers will not be able to buy the new XP version and install it on existing PCs. Instead, they'll have to spring for a new system if they want Windows Media Center. Freestyle PCs could be used for either standard computing or digital entertainment.

"Consumers aren't forgiving, especially for products that come and are a new idea," said Jodie Cadiuex, Windows Media Center marketing manager. "If this doesn't work well the first time around, they tend to not want to go back any time soon. We felt very strongly that for a positive consumer experience it should be OEM only"--meaning only from PC makers.

The first Windows Media Center PCs and PC entertainment hybrids would appear in time for the holidays, said Cadiuex, who declined to give a specific date.

"We can tell you that it would be before Comdex," the Nov. 18-22 computer trade show in Las Vegas, she said. "We're still in beta."

Microsoft delivered the first Freestyle entertainment PCs to testers in June.

Yankee Group analyst Ryan Jones said that November is too late.

"They're missing an important date somewhat by releasing for the holidays," he said. "This is not a game console. This is a PC with digital media functionalities, and the real target market for that is the dorm room. By missing Aug. 1, that's an unfortunate timing for them."

Cadiuex acknowledged that college students and teenagers are important target market groups for Windows Media Center PCs, as they would use the systems both for computing and digital entertainment.

Microsoft also is interested in other potential buyers.

"If you're a digital media enthusiast--which approximately one-quarter of U.S. households are that have PCs--and you have your PC and TV in the same space, you'll use (Windows Media Center) there," Cadiuex said.

The first iteration of Windows Media Center would appear on desktops, not notebooks, Cadiuex said.

Taking on Apple
Analysts noted that the announcement--Microsoft's second regarding digital media this week--coincides with Apple Computer's Macworld trade show, which opens on Wednesday.

Windows Media Center "really hits Apple where it hurts," Jones said. "Apple has been working really hard to establish themselves as the digital media hub with iTunes and iPhoto. Everyone knew digital media was going to be big on Windows XP, but to layer on some very simple interfaces you can access by remote control from across the room really hits Apple where it hurts."

Apple has positioned the Mac as a digital hub for connecting cameras, camcorders and music players and also for making movies or burning them to DVDs. PC makers created the strategy of using a computer in this market but so far Apple has come out with more software and more actively promoted the idea.

"Microsoft is trying to play catch up with Apple," said Technology Business Research analyst Bob Sutherland.

The timing of the announcement, he said, could be designed to draw attention away from Macworld and Apple's digital media strategy.

Some of the new features on Windows Media Center would be hard for Apple to easily dismiss, Jones said.

Using a remote control, consumers would be able to listen to digital music, work with digital photos, create movies or watch DVD movies or TV shows.

"Apple was offering remotes with their PCs, like in the early '90s," Jones said. "But with the penetration of broadband and the ability to watch DVD on PC now makes it more relevant."

Windows Media Center also comes with a digital personal video recorder (PVR) that serves up TiVo-like features, as long as the PC contains an additional TV tuner card and other hardware.

PVRs, which let consumers use an online guide to schedule shows for recording ahead of time or to stop or replay live action programming, are not new to PCs. Sony ships several Vaio consumer PCs with its GigaPocket PVR. On Monday, El Gato Software launched the first consumer PVR for the Macintosh market.

But PVRs for PCs, like their TV counterparts, aren't big sellers. NPDTechworld analyst Stephen Baker said that at retail, "the volumes on these are pretty low, usually 10,000 units a month or so."

Eventually, though, PVRs, or at least the capabilities they offer, could be commonplace. Customers who use them like them, according to many market surveys. In two to three years, all the electronics for using a PC hard drive like a PVR will be included in a computer's chipset, according to Sean Maloney, general manager of Intel's Communications Group. If Microsoft's software continues to evolve, consumers could find themselves buying a PVR every time they buy a PC.

The programming guide for Windows Media Center's PVR "offers at minimum, seven days free," Cadiuex said. "We're a not offering" an enhanced for-fee programming guide. "But it's a platform for partners to offer it."

Microsoft will not license the decoder for DVD playback, a policy it started with the official release of Windows XP last year.

"We're still going to be using somebody else's," Cadiuex said.

Then again, taking on the cost of the decoder fee would be a big expense given that 42 percent of PCs with Internet access have DVD drives, according to Yankee Group.

"If Microsoft were to take on that licensing fee, it would be a fair chunk of change, Jones said.

Hewlett-Packard and Samsung are among the computer manufacturers developing Windows Media Center PCs. Cadiuex would not reveal pricing, but she estimated it would be between $1,000 and $2,000.

 

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