August 5, 2003 9:00 PM PDT

Microsoft sends Media Center abroad

Microsoft is taking Media Center further overseas, with plans to launch the PC entertainment software in China, Japan, Germany, France and the United Kingdom.

The company, which announced the expansion on Wednesday, said the primary hurdle to the expansion was gaining access to the program guide information needed to enable PCs to act as a digital video recorder. Until now, sales of the entertainment-oriented PCs have been limited to the United States, Canada and Korea.

"For us, it shows a nice, not only validation of the whole media center concept, but (also) momentum," said Tom Laemmel, product manager for Microsoft's Windows eHome Division.

Media Center PCs run a specialized version of the Windows XP operating system that has an extra interface to make it easy for people to view photos, music and video on a television hooked up to a PC.

Microsoft, based in Redmond, Wash., won't say how many Media Center machines it has sold, but IDC analyst Roger Kay estimated it is in the high tens of thousands.

Hewlett-Packard last October became the first computer maker to start selling a Media Center PC. It was followed by Samsung, Alienware and Gateway. In June, Toshiba began offering a notebook with the Media Center OS and has since added a 17-inch version of the laptop.

Kay called the overseas expansion an endorsement of the software by Microsoft, but noted that taking the product to new areas is an easy way to boost sales.

"If you look at Microsoft's main problem, which is to find new revenue streams, going international on a new product is pretty close to a no-brainer," he said.

At the same time, Kay said Microsoft should have an easy time finding computer makers that want to sell Media Center PCs. He noted that the software's video recording feature means that the computers have to be fairly high-end models with plenty of memory, plenty of hard-disk space and a speedy processor.

The software maker said it has lined up a number of hardware makers in each new country. These include Fujitsu and NEC in Japan; Packard Bell in France, Germany and the United Kingdom; and Fujitsu Siemens in Germany. HP plans to sell Media Center models in France, Germany, the United Kingdom and China, while Toshiba will sell devices in all five new markets.

Although sales have been relatively modest in the United States, Canada and Korea, Kay said he expects Media Center PCs to have a fairly good holiday season now that the machines have been on the market for a year and the economy has stabilized, if not improved.

At the moment, consumers have to buy a new Media Center PC to use the features in the specialized operating system. But down the road, Microsoft may decide to create an upgraded version of the operating system.

In addition, the features of Media Center could eventually become an optional add-on in PCs configured for customers by companies such as HP or Gateway, Laemmel said in a recent interview.

"I would see that happening in the not-too-distant future," Laemmel said. He added, however, that it is unlikely to happen before the release of the next version of the Media Center OS, which is slated to happen alongside the release of Longhorn, the next major version of Windows.

 

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