Picture if you will, the family home of the future. There are no keyholes in the doors, no wires to trip over, digital family snaps are scrolling slowly through LCD "photo frames" down the hallway. Out have gone baby monitors in the nursery, video players under the TV, amplifiers, radio units and CPUs, all replaced by a series of LCD screens of differing sizes, touchpads, biometric scanners and remote controls. Sitting somewhere unobtrusively controlling it all is a little black box. And on the little black box sits Microsoft software.
This vision, however, is a good decade away and in the interim the very software Microsoft predicts will evolve into a centralised control of digital media throughout the house, is having the opposite effect. Rather that centralising and consolidating hardware, it has given rise to a proliferation of hardware solutions, as vendors and manufacturers look for their niche in the emerging digital media field.
Microsoft will be releasing its Media Centre edition to the Australian market in mid October. Along with launch partners Acer, Toshiba and HP, the software giant is making some enthusiastic predictions regarding how the software will be received. Launch partners are hoping to learn from experience in the US and European markets, where Media Centre systems are already being sold.
However, product maturity in overseas markets hasn't solved the quandary of how this software should be bundled, and the Australian market is about to play guinea pig to a plethora of products of all shapes and sizes.
The bad news for IT resellers is that at this stage most of these solutions are destined for consumer electronics shop floors, essentially because they don't look like PCs anymore. And let's face it, no one comes into a computer shop looking for a TV.
There are, however, some notable exceptions, and some steps IT resellers can take to get a piece of the action.
Sit back and relax
Reseller rule number one, when it comes to moving digital media gear, is to give the customer a chance to experience new products. In most cases that means investing in an armchair and clearing a substantial chunk of the shop floor.
"Resellers need to change the way they sell in order to get involved in the digital media market," chief technology office for local OEM Hallmark Computer International, Phillip McIntosh, said. "They can't sell digital media products on processor speed or hard drive capacity; they need to sell the experience. They need to simulate a lounge-room environment by setting up an armchair, with surround speakers and a large LCD screen."
Like most hardware manufacturers, Hallmark is taking a multi-pronged approach to the Media Centre launch. In the run up to Christmas it plans to be shipping three products with totally different form factors. A long flat unit designed as an extension to an existing hi-fi environment, a cube unit offering digital media storage and control, and a tower much like a traditional PC offering CD, DVD, TV and FM radio functions.
"We expect the IT reseller channel to be more comfortable with the device that actually looks like a traditional PC," said McIntosh. "The hi-fi form factor is more aimed at audiophiles, so we are looking at a different channel."
Similarly, Volante's local manufacturing arm Ipex is taking a three-pronged approach, with one Media Centre unit designed to look like a VCR, another made to look like an amplifier and a third a high-powered, but small scale PC designed for kids.
"The challenge is that with Media Centre the market is more fragmented than the traditional PC market. Everyone seems to have a different approach in terms of what they want to do with Media Centre, especially in terms of where they will put it, and how they will tool it," technical director at Ipex, Yaron Schwalb, said. "Ultimately we are looking at integrating Media Centre into an LCD screen so that it is a single unit."
Like Hallmark, Ipex is taking a horses-for-courses approach to the reseller channel.
"If we take a product that looks like an amplifier into the computer section of Harvey Norman, it will die," Schwalb said. "It is just not a PC, so people who are looking for a PC won't buy it."
Similarly, Optima plans to ship its Media Centre offering, called My PC, through the home entertainment retail channel.
"We are targeting the Media Centre market through people like Retrovision, and The Good Guys, because they can bundle it with what they already have on the shop floor," Optima's retail and channel desktop product manager, David Choi, said.
However, not everyone is jumping ship with their Media Centre cargo. Local OEM Pioneer it taking the opposite track, bundling its Media Centre units with quality large screens designed to capture the imaginations of IT customers. Nonetheless, product manager Jeff Lee insists that lounge-style shop floor displays will be the key to IT retailers picking up sales.
"They need to set themselves up with a big screen and a remote control, so that the customers understand what they are buying," Lee said.
The convergent challenge
While some vendors are largely pinning their hopes on the home entertainment channel, others are predicting the emergence of a whole new channel, or at least a whole new approach to home entertainment sales.
Based on its experiences in Europe and the US, Microsoft Australia's senior product marketing manager for Windows, Danny Beck, said the company aims to position Media Centre devices as digital entertainment units.
"We see a new category of reseller, the convergent reseller," Beck said. "We are working closely with major retailers such as Harvey Norman, Myer Megamart and Dick Smith stores so that when you walk in you'll be blown away by the digital media experience."
However, Beck is not about to limit Media Centre products to home entertainment outlets.
"We also see people who are potentially looking for a second PC, and don't realise it can also operate as a stereo system," Beck said. "If they can buy a single device which seamlessly works with peripherals they will be interested."
And while explaining how to hook up such a system would be daily routine for many IT resellers, it may not be so straight forward for the home entertainment channel. Vendors on the verge of launching Media Centre-based products have taken this into account and are in the throws of providing their retail partners with training in the technology.
"There is a huge shift in instilled knowledge required to sell this sort of product and technology," national retail manager for Toshiba, Rob Wilkinson, said. "We are looking to train product champions at each location where Media Centre products are sold."
According to Wilkinson, the training will feature technical instruction and a focus on the overall consumer experience. However, Wilkinson suggested the transition from consumer electronics over to digital entertainment will not be straightforward even for stores which stock both IT and home entertainment goods.
"Media Centre products will be purely sold around an in-store experience," Wilkinson said. "Some mass merchants are structured to deliver that experience but many are not ready."
Wilkinson claimed mass merchants will need to situate convergent Media Centre style products in between consumer electronics and IT departments if they are to take full advantage of cross merchandising opportunities.
"Unless these are already situated side by side this could be very difficult to achieve," Wilkinson said. "But they will need to situate these new products between the two departments because that is where the technology fits and they can draw upon sales opportunities from both sides."
Ultimately, like Beck, Wilkinson envisions specialist retailers emerging predominantly from the IT and audio-visual fields.
"As vendors we can provide some direction, but that final step needs to be provided by the retailer," Wilkinson said. "They need to be able to demonstrate the converged area, and drive that experience home to the customer, but they also need to be able to change people's mind set when it comes to digital media."
Tuning into wireless sales
But before you glance around a room filled with beige boxes and despair of ever participating in the digital-home-entertainment market place, rest assured that there is still a place for resellers with IT, and especially home networking, know-how.
Over the next 18-24 months Microsoft plans to migrate the majority of new PC sales to the Media Centre edition. Whether they like it or not, most users of new PCs will have digital media capabilities.
Whether they buy their Media Centre products from Myer or their local PC store, consumers will have an all important introduction to the brave new world of convergence. However, in order to get this new home environment functioning, they will also need to invest in home networking, especially wireless.
And while mass merchants and consumer electronics retailers have the know how when it comes to making the customer feel at home, IT retailers are far more likely to be able to make the products work once they get them home.
The moral for the traditional reseller channel is to keep abreast of technical developments in the home entertainment area, and keep a watchful eye out for partnering opportunities with other retailers who might find themselves saddled with more technology than they can handle.