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Media centre take-up divides channel

Media centre take-up divides channel

Channel pundits are divided on the success of Intel's digital home platform, Viiv. Many claim it has not delivered sales but others highlighted a steady growth of media centre PCs in the retail sector.

The Viiv platform was launched in March with much fanfare, 18 months after the release of Microsoft's Media Center Edition (MCE). Plus Corporation managing director, Nigel Fernandes, said while vendors and distributors were throwing massive weight behind Viiv, it had failed to set the world alight.

"It's another MCE story - all talk and advertising. Customers are not inquiring about it at all," he said.

The IT reseller carries media centre PCs from TodayTech and Altech as well as building systems to order. It had initially listed Viiv products online and mailed 10,000 customers to trigger sales. Fernandes said it was yet to receive a single inquiry from the campaign.

"It's another wasted effort - I don't think the market is ready for it or interested in it," he said.

"We've had success in the home theatre market with plasmas and projectors. But we have not seen people wanting to use a PC to access high-definition content or download movies from the Web.

"It wasn't a big change to go from using a video to a CD or DVD. But using a PC to play a movie is a hassle."

Fernandes said its media centre sales had not increased during the past 12 months.

Multimedia Technology (MMT) purchasing manager, Michael Muscat, said Viiv had made little impact on the market.

"The next major driver will be Microsoft's [Vista] release," he said. "It's a bit like we're back into the buying cycles that existed prior to Y2K."

Ingram Micro peripheral manager, Paulo Mpliokas, said part of the problem was a lack of distinction from previous MCE campaigns.

"The Viiv strategy is about making the PC central to the whole home entertainment experience, but I'm not entirely convinced anybody's picked up on it yet," he said. "The marketing and launch just hasn't been all that persuasive.

"The idea is the same as what we've been talking about for a while, in terms of the convergence of digital home entertainment. The launch of Viiv hasn't made it any clearer."

Altech national sales manager, Kevin Hartin, had seen an aggressive spike in MCE sales since Viiv was launched but suggested this had played largely into the hands of multinational vendors and mass merchants. Some Harvey Norman franchises had well-established relationships with Altech, he said, but it was difficult to get the message into head office.

"Larger retailers are getting the mindshare because the multinationals are waving around marketing dollars we don't have access to," he said.

Although it was struggling to get traction at the moment, Hartin predicted the marketing messages of major partners like Microsoft and Intel would see it gain a foothold later this year. While the IT channel and mass merchants each accounted for 40 per cent of its Maestro sales now, he expected most growth to come from consumer electronics retailers.

"We are confident the CE look and feel of our designs will stand us in good stead against conventional PC offerings," he said.

"Traditional CE retailers have been a bit gun-shy to date but we are seeing a resurgence of interest as the media centre products mature.

"I expect more than half of our Maestro sales will come from the CE channel in the next year. The IT channel will be static and the mass merchants will offer steady growth but CE will explode."

Acer marketing director, Raymond Vardanega, said its media centre sales were being driven by IT retailers, not the CE market. "It will take some time for these types of products to spread across from IT to CE," he said. "This is partly because our initial products have been towers. We are working on other form factors, which should open up new markets."

Greater broadband access, sub-$2000 price tags and better consumer understanding had helped drive sales, he said. "Compared to the launch of Media Center Edition, Viiv is far more successful," he said. "In the early [MCE] days, the numbers were terrible. People didn't get it. The cost structure and training wasn't right. We have now had nearly two years of MCE, with new products and platforms coming through. Retailers are more aware and consumers are seeing the benefits."

Harvey Norman general manager for computers and communications, Rutland Smith, claimed Viiv reaction had been favourable. "We've seen steady growth in Media Center Edition almost since it started," he said. "One phenomenon that's leading to the increase is manufacturers is making media centres a bigger part of their range."

GfK analyst, Neville Ray, said its April figures showed Viiv representing just one per cent of desktop sales. However, overall media centre units had grown from 11 per cent of March desktop sales to 23 per cent.

Jeanne-Vida Douglas and Brian Corrigan contributed to this story


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