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Home is where the digital hub is

Home is where the digital hub is

Picture watching TV and DVDs in the bedroom, playing computer games in the living room, and emailing from the balcony. Welcome to the world of all-in-one entertainment PCs.

Indeed, a host of vendors (from the traditional IT side to the consumer electronics camp) are jumping into the PC entertainment game with a slew of new products and gadgets that aim to connect devices in the home.

The recent release of Microsoft Windows XP Media Centre 2005 Edition in Australia is driving the adoption of PC-based home entertainment gear - and whitebox players along with multinationals are getting in on the action.

As part of the launch, Microsoft has inked agreements with HP, Toshiba, Acer, Packard Bell, Optima, Altech, Hallmark and Leader.

Players are offering different form factors from desktops and tower PCs to laptops and set-top boxes, Microsoft Australia's senior product marketing manager for Windows desktop, Danny Beck, said. Some were introducing form factors that didn't look like PCs, but offered all of the regular functionality of a PC, while addressing the digital media push (adding a TV tuner and TV output).

For instance, Toshiba has launched a four-in-one entertainment unit for the home, dubbed Qosmio, which offers a TV, stereo, DVD recorder plus a wireless notebook.

And there's more entertainment action. Microsoft also launched the Portable Media Center platform, which is a companion product to any Windows XP-based PC and doesn't require a Windows XP Media Centre PC.

The software is first available on a handheld device from Creative (dubbed the Zen Portable Media Center), which allows users to play audio and video, as well as view images. While similar to the Windows Media Center OS for PCs, the software was designed to be used with a small-screen device - a new category of product, Beck said. Samsung is also offering gear.

Essentially, the devices will have screens that measure 3.5 inches in diameter, and have a hard drive with a capacity of 20GB to 40GB. The gear can connect to a PC via USB 2.0 and work with any Windows XP or Media Center PC, as well as connect to a TV.

Beck said the industry was responding to the bulging growth and interest in digital media. "It's not only about expanding the digital capabilities of a PC, but also catering to the whole portable media market," he said.

In 2005, Microsoft plans to launch the media centre extender into the Australian market. Acting as a set-top box (and offered through HP and Alienware), the technology offers wired or wireless connectivity.

"It allows you to relay all of the information from the media centre PC from one room to another," Beck said. Calling it the ultimate in multitasking, he said the media centre supported up to five extenders.

So what is driving the digital home craze?

IDC's PC hardware market analyst, Michael Sager, said the biggest factor revving up the overall market and making the digital home more of a reality (even though there is a long way to go) is the increase in broadband.

"We just tipped a million broadband customers in Australia for the first time," Sager said. "The amount that can be downloaded and the speed is also increasing - and that's the bottleneck that needs sorted before the digital home really grows."

But Australia was a bit of a laggard when it came to broadband adoption, he said.

"If you look at other developed countries, we are a bit behind," Sager said.

But things are changing. The growth of private wireless hotspots was another factor fuelling the market, he said: "Once information is free, it can be accessed wirelessly in different parts of the house - and that's another big driver."

Since the digital home market was in the early adopter phase, resellers have had limited product to cater to the space - but that was slowly changing, Sager said, and would mean many more installation jobs for the channel down the track.

At the moment, specialised resellers had done most of the jobs, or home users had done it themselves.

So what is all the fuss about on the product front? For starters, one part of the puzzle is the rollout of the media centre PC - which can offer more than traditional connectivity and productivity applications such as email, Web browsing and word processing.

The system delivers integrated digital entertainment, allowing users to enjoy music, TV, personal video recording, pictures, digital video and DVD with remote control access.

A key part of the package, Microsoft's Beck said, was getting access to content on demand (including music services, games, sports, news and entertainment).

And while there's a growing digital entertainment buzz, the industry was still in a nascent stage, AMD's digital home, divisional manager, computation product group, Toussaint Celestin, said.

"Even though you have many households that have PCs and have other digital devices that access entertainment, the industry has not found the one-all-be-all device or the one-all-be-all method by which all of those devices are being connected," he said.

As such, consumer electronic gear, PC technologies and content categories were all trying to address specific solutions, Celestin said.

"The content portion is a main driver," he said. "People want content and access to content. This is anybody from a DSL, a broadband provider to a large entertainment conglomerate," he said. "They too are part of this technology landscape. So by no means is there one solution and we're still trying to figure out what people want, and how to get it."

Given the backdrop, AMD is positioning itself to power up the home.

"From an AMD standpoint, our life is around the chip and the PC," Celestin said. "So how do you get the PC to be adopted to allow people to access the entertainment?"

Before users could freely access content from anywhere in the home, there were prerequisites that needed to come to light including networking, wireless technologies and high capacity storage, he said.

"If you're dealing with high definition content, at the end of the day, how fast you can manipulate, massage, and pump that data in and out of the feed will affect the viewing experience," Celestin said. "If the PC is going to spread throughout the home, we understand high performance, the kind you'd expect at the professional level, will be necessary today and into the future."

In the meantime, Microsoft's Beck said the industry continued to see huge growth in digital activity, and was preparing for an even greater appetite. To date, company research showed the majority of Windows XP PC users had digital video content, for example, and watched DVD movies on PCs.

Jupiter Research also found 54 per cent of customers running Windows XP had a CD or DVD player as part of the whole computer. In 2003, there were more than 118.5 million digital images captured and shared on Windows XP-based PCs.

"The scenario in terms of digital media being consumed by our users is huge," Beck said. "People are using their PCs for browsing the Net, running Windows and doing traditional things, but this whole convergence of CE and IT is opening up new functionality.

"The whole next digital entertainment revolution is around PC convergence and hence the need for a media centre PC," he said. "It's the transformation of the home PC into a digital media hub."

Microsoft isn't alone in its efforts to cater to the home. Indeed, the industry is working towards pumping out beefier gear for the home front in response to the thirst for digital media.

Based on the Intel Pentium 4 processsor with hyper threading technology and the Intel 915 Express chipset, entertainment PCs (EPCs), are now available.

Essentially, EPCs combine the functionality of audio and video devices, allowing consumers to store and manage personal media including photos and home movies, as well as access digital entertainment such as movies, music and recorded TV programs from one remote control device.

AMD is also hot on the trail, offering the Athlon 64 processor FX-55 as well as the 4000+, which both aim to rev up the gaming and digital home front by offering meatier chip performance.

The Athlon 64 FX was the gaming processor, designed to be optimised for graphics and 3D representation on the screen, senior product manager for microprocessor business unit's computation product group, Jonathan Seckler, said. "It's designed for high performance PCs, and 3D games are the killer app."

The latest release, the FX-55, replaces the FX-53, which will be phased out.

Meanwhile, the flagship brand - the Athlon 64 on the desktop space - features a 64-bit high performance architecture, cool and quiet technology, and anti-virus protection.

"These are key characteristics that resonate well and are most applicable in a digital media centre type PC," Seckler said, "which are being used for digital content creation, photo and video editing, and watching movies."

The latest technology addresses the trend towards entertainment style PCs.

"One of the advantages of the Athlon 64 is when you're watching movies and listening to music is the quality of the stream in terms of jitteriness and performance," Seckler said. "The architecture of the Athlon 64 offers a smooth performance."

What's up for grabs?

In addition to the avalanche of media centre PCs, Lako Pacific CEO, Evan Kourambas, said other hot items catering to the home entertainment arena included audio products and digital TV tuners, which he dubbed top peripherals for the home PC.

"There are some hot products that are coming out including mini hard disk MP3 players, and external digital TV tuners [these are picking up in sales]," Kourambas said. "We are currently selling 1500 to 2000 TV tuner cards per month [including digital, HD and analogue]."

The latest digital home PC entertainment products and trends for Christmas, Kourambas said, included the rollout of the media centre PC concept.

Lako has begun distributing the Pinnacle Media Center PCTV which, he said, was an alternative to the Microsoft Media Center OS.

"The Pinnacle product will ship with a TV tuner, and offer proprietary software comparable to Microsoft," Kourambas said. "You can use the computer as normal, but as soon as you click the remote control and turn it on, it will be a screen that takes over Windows and it will give you four or five different categories on the screen."

For example, users can watch TV, change the channels, record to the hard drive, use an electronic program guide and take out TV commercials, as well as play MP3s off the hard drive, and view JPEG files and browse the Web through the TV.

"It turns your television into a home entertainment system," he said.

Other products launched for the holiday season include a DVD/multimedia jukebox appliance, 5.1 surround sound headphones for gamers and movie viewers, digital TV tuners and PVR - a Dvico FusionHDTV for desktop PCs), and mini-HDD MP3 players.

In addition to the media centre hype, Kourambas said other trends included the push towards appliance-type devices (including MP3 players, handheld devices, and plug-and-play type devices).

"Other areas we are looking at are digital audio [digital radio], which is very much in its infancy in Australia. Personal video recorders and set-top boxes [with the hard disk inside]) will also be a focus next year."

Digital media stream products were other categories to watch, Lako Pacific's marketing manager, Eugene Wong, said. "We have a number of products that act like a media client or stream digital multimedia files to the TV and home audio system."

The company recently rolled out the TViX, which is a computer appliance that stores backed up DVDs (files such asdigital photographs and MP3) onto an encased hard drive like firmware.

"You can plug these into your TV, or connect it with your TV and home audio system, and play out DVDs or digital still photos or MP3s onto this external box," Wong said.

IDC's Sager said some of the big growth categories in the lead up to Christmas included digital set-top boxes (dubbed DVRs), LCDs and plasma TVs, portable music players, along with digital and video still cameras.

"Those are the four areas that are bridging the IT and consumer electronics areas," he said. And expect to see more product categories once more and more industry players - from all walks of life - come to the forefront to feed the growing digital home hunger, Sager said.

"Now you have people that typically played in IT trying to get into consumer electronics, and the CE guys trying to bridge the gap between IT," he said. "The PC IT vendors, for example, are taking their products and applying it to a digital home."

General manager of distributor Galas Electronics, Peter Xie, said the consumer electronics and IT merge was good for business - so too was the Microsoft OS launch.

The company distributes more than 200 product lines, and was banking on the CE/IT combination reeling in additional opportunities for the distributor and its reseller base.

"MP3 players will be fully featured and functional," Xie said. "Portable video players in all shapes and forms are hot. And with Microsoft's release, we are embracing the portable side of things. We will have one or two additional product lines that use the OS."

Chief among them, he said, was the Microsoft-compatible digital media player, which was slated for release at the end of the year. The product, which has a 30GB-40GB hard drive, lets users download files, and play MP3 audio JPEG and audio video files.

While we're at the beginning of the digital home story, it's certain we'll see the whole gamut of form factors, new types of mobility devices, improved integration and connectivity, along with advancements in wireless technology, Microsoft's Beck said.

So grab a chair and expect the unexpected.


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