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Monday, October 11, 2004 - Page updated at 12:00 A.M.
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Microsoft's latest offerings to get wired with TV

By Brier Dudley
Seattle Times technology reporter

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Roger Kay wanted to watch the vice-presidential debate last week, but his family went out to dinner, so his kids weren't in bed until 20 minutes after the show began.

But Kay, a PC industry analyst in the Boston area, was testing a computer with Microsoft's new Windows XP Media Center Edition 2005 software, and it worked as promised: The system recorded the show onto the computer hard-drive.

With the kids tucked in, Kay went to his couch and used a remote control to run the PC connected to his TV. The debate played from the beginning, even while the rest of it was still being recorded.

Whether he had caught the debate or not, Kay believes that computers that function as TV tuners, video recorders and music players will account for a fourth of all consumer PCs sold in the world by 2008.

"It takes awhile for a new concept to catch on, for people to become aware of it, to understand and to grow enough fondness to actually go and buy them," said Kay, an analyst with IDC in Framingham, Mass.

It's already happening in Japan, where about half of all consumer PCs are now sold with built-in TV tuners, Kay said.

Tech companies have talked for years about how computers and consumer-electronics devices are converging and ushering in a new era of digital entertainment.

This long-awaited convergence has taken longer than expected, but Microsoft will give it a nudge tomorrow when it unveils an array of products and begins a holiday sales blitz.

At a glitzy launch event in Los Angeles, Chairman Bill Gates is expected to present an array of new Microsoft digital-media technologies.

The lineup includes the MSN Music store for purchasing downloadable music, technology to prevent unauthorized copying, and Windows-based devices for playing digital music and movies.

The Media Center software that Kay tested is the centerpiece. It's the third version of a product that debuted in 2002, and the company has a reputation for taking three version to iron out the glitches.
 
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So far, the first versions of Media Center sold less than expected. Kay had predicted 1.5 million units would sell this year, but now it looks like perhaps 500,000 will sell. That's out of more than 170 million Windows PCs that will be sold this year.

One factor is cost: Media Centers initially approached $2,000, but lately prices have fallen to around $1,000. Microsoft is making the new version available to small-scale PC makers, as well as big players, which could help lower prices further.

With the PC market largely saturated, Microsoft and its partners are hoping that media-focused machines entice consumers to upgrade or buy a second PC for entertainment.

Intel is also doing its part by helping computer companies develop a new series of "entertainment PCs" that look like DVD players. One goal is to make PCs less obtrusive so they can fit into a living room or TV room.

"We want to sell more PCs in any part of the home," said Becky Brown, Intel consumer-desktop marketing manager. "This is one of the areas we think is going to help us grow and continue to grow the market."

Brier Dudley: 206-515-5687 or bdudley@seattletimes.com

Copyright © 2004 The Seattle Times Company

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