Entertainment may not be the primary reason for buying a PC or handheld, but many consumers want to merge their play life with their work tools and are prepared to pay quite a bit for entertainment add-ons.
Georgina Swan goes a-gaming.
There was once a vast chasm between them: the staid business tool that was the PC and the exciting world of entertainment.
Sure, at 5pm work would be left behind for the mad shoot-em-up mayhem of tournament Doom in IT circles. But transforming the humble PC into a Dolby Sound system that could capture video and burn DVDs was not only beyond the imagination of the average computer user, it was light years from a price range that would bring the technology into the mainstream.
These days, even those who don't know anything about the technology know what they want from their PC - and it's a lot more than just word processing.
"PC and consumer electronics categories are converging and from a channel perspective it is going to be very interesting," says Marco Manera, managing director of Logitech Australia. "It will be challenging for resellers, but it will also be a good opportunity for those who are already in both markets."
Resellers are already responding to the increasing interest in personal audio equipment. Stephen Paddon, managing director of independent retailer Pulsar Computers in Melbourne, has always done well out of the PC gaming market, but his business has recently moved into DVDs in response to customer demand.
"At the end of the day, it is all entertainment," he says. "Although it is not a mainstream thing for us, we are selling a lot of the higher-end speakers - the 5.1 Surround Sound systems and so forth. Customers are buying them for their PCs. They are also using them on their consoles, which they are also using to play DVDs."
Manera believes the trend away from the two-speaker stereo setup that is shipped with most PCs will continue. "We are now moving to bigger and better sound cards, Dolby Digital and Surround Sound, and it is all helping the market to grow," he says.
Creative Labs is another vendor that believes the PC entertainment market is on the rise. The company has released its first external sound card, which has already found a following among notebook users who want high-quality sound.
"You are starting to get notebooks with Dolby Digital output now but you still need a decoder," says Creative Labs marketing manager Nick Angelucci. "The Creative idea is to have everything external and portable; you just plug in and go."
Computing power is more than adequately up to the challenge, and falling prices mean entertainment technology has become very accessible, says Louis Mittoni, managing director of distributor Mittoni Technologies.
"It is a relatively inexpensive option to turn a computer into a home entertainment system," he says. Mittoni distributes a card that allows users to watch or record TV on their PC. The product has proven very popular with resellers, which sell up to 30 cards a month to their customers.
"It's a niche of computing where resellers can get good revenue and ongoing sales," Mittoni says of PC entertainment. "It is certainly a market that provides better margins than the general PC products."
But the key to selling these systems is hands-on demonstrations without the technical jargon, according to Angelucci. He says many resellers need to think differently about how they sell these products.
"At this stage, resellers want to stick to the true and proven product range - CD-ROM drives, sound cards, motherboards and chipsets," he says. "But now we have two customer types coming into the store. The first know what they want, but the second have no idea and want to get involved. They've got the money and they want to see these things in action. They want resellers to talk in English."
Creative is working to convince resellers that they are in the best position to educate, sell and onsell to the PC entertainment market, but it is hard going.
"Resellers are worried about how much stock they have and what happens if that stock doesn't move," Angelucci says. "But if they sell the sound card first then the customer will want the CDRW, then the PC Cam, then speakers, then DVDs and it just continues on."
It's not a problem that is limited to the Windows-based market. Apple has firmly positioned itself in the home entertainment market with a suite of software for playing music, ripping CDs and editing digital video on its iMac. But since it offers them as free downloads, Apple resellers must be adept at selling the entertainment add-ons, such as Apple's iPod MP3 player.
"Apple dealers need to be a lot better at selling the bits and pieces that go along with a purchase," says Adam Connor, managing director of Apple reseller Total Recall Solutions. "It's important because 95 per cent of other shops don't sell our brand. If a customer goes into another store, there is a good chance they will end up with a PC purchase."
Apple resellers have found that Apple's combination of design style and entertainment has proven a compelling argument in computer purchasing, particularly in the digital video arena.
"Apple really has some price-leading products at this end," Connor says. "In the hobbyist market, price may lead some people to look at PCs, but in the prosumer' market Apple is viewed as the better value option."
Apple is by no means the only vendor that has recognised the convergence of the PC market and home entertainment. Compaq, a company more often associated with PCs than audio products, has just announced an addition to its iPAQ range which moves the brand beyond its successful handheld devices. It hopes to extend its reach into the entertainment arena with its iPAQ MP3 player and Personal Mini-CD Player.
"The PC market is very competitive and the margins have decreased," explains Tim Brown, Compaq's product manager for iPAQ and connected devices. "These kind of innovative products are a way for us to provide more retail opportunity and extra value to customers."
Compaq is positioning its iPAQ brand at the ever-narrowing space between business and home environments.
"It is a blend and a balance between work and home these days," says Chee-Mei Gan, Compaq's mobility manager. "From a business perspective, you use an iPAQ Pocket PC for information management. When it comes to personal entertainment you can play music, clips and video files. Suddenly the iPAQ is now useful for home. Everything is integrated and related - we are no longer looking at isolated devices."
The fun factor
It may have originated as a business tool, but there is a quiet and rapidly expanding market out there for the PDA that is all about entertainment, namely games. While most PDAs ship with a couple of simple games, increased processing power and screen quality mean that games development for the handheld is flourishing. Developers such as ZioSoft are even incorporating Bluetooth technology into their programs to allow wireless multi-player gaming.
"Games are typically not the first thing people buy a Pocket PC for," says Compaq's Brown. "Having said that, the memory capacity and processing power built into handhelds these days makes the games better and better."
Toshiba's new Pocket PC also allows gamers to load arcade-style games via its SD slot, which not only incorporates memory but I/O support. Taking the entertainment concept to even further heights, users can also convert video files to WMV format.
"You can download films or music and store it on a SD card," says Toshiba product marketing manager Justin White. "You can also combine the handheld with a headset to listen to the clip in privacy with complete control."
Still, it's early days. Despite the number of products that are making their way into the channel, resellers have yet to see the opportunities translate themselves into dollars.
"We don't sell games for Palm and the likes," says Pulsar Computers' Paddon. "I looked at it, but to be honest I don't think the market is there yet. It will happen because the calibre of games is really good, but demand is not there at the moment."