Having worked with PC makers to lower prices on Media Center desktops, the software giant is now expected to unveil a software update that grants the PCs access to a wider range of online content and services.Microsoft Corp. is about to give Media Center PCs a new point of view.
The Redmond, Wash., software giant is expected to unveil on Friday an update for its Windows XP Media Center Edition operating system that will boost the computers abilities to tap online entertainment such as movies, access e-mail and even let users go shopping via the special user interface, designed to allow easy access to multimedia.
The new features, which will come as part of a rollup or collection of updates dubbed Update Rollup 2 for Windows XP Media Center Edition, will expand the capabilities of Media Center PCs and shift their focus from showing photos and videos to on-demand online entertainment and content services, provided by big-name outlets such as MTV.
Even the least expensive desktop Media Center models, which sell for as little as $599 and come without TV tuners or high-end graphics, are expected to be able to tap the new features.
Price has played a major role in the increase in shipments of Media Center PCs seen of late. Manufacturers began offering the operating system in under-$1,000 desktops earlier this year, leading to huge year-over-year leaps in Media Center sales at retail in the United States, analysts said.
"If weve learned anything about Media Center its that people think the feature set is nice. But if [Microsoft] can drive the price down and work with PC makers to position the product as a more media-centric front end than an all-encompassing home management system, it seems to be a much more readily appreciated strategy" by consumers, said Steve Baker, analyst with NPD Group Inc.
Thus, Baker said, "Weve seen people flock to it because [Microsoft and PC makers] have addressed the price…and at least slightly repositioned it as a media management interface and not overarching digital home entertainment system."
Click here to read more about the outlook for Media Center PCs.
Media Center retail sales in the United States have jumped recently, thanks to the shift in pricing and, to some extent, purpose, Baker said.
Whereas they were only 4.3 percent of desktop PC unit sales at retail in August 2004, Media Centers hit 27.7 percent of desktop sales at retail in the United States in August 2005, NPD figures show.
Although the average selling price for a Media Center PC fell significantly during the same time period—it dropped to $822 in August 2005 from $1,370 in August 2004—it was still significantly higher than the $674 average for all desktops sold at retail in August.
The machines may have even helped some to propel retail desktop sales, which have generally been up in the low single digits—ticking up 6 percent in August, for example. However the bulk of that growth likely came from aggressive prices and higher purchasing in the $500-and-under desktop segment.
While Media Centers seem to have found their footing at retail recently, Microsoft developers have been working for more than a year on the rollup—formerly known by the code name "Emerald"—and its follow-on, a major update dubbed "Diamond," which is expected to come out along with Windows Vista, the companys next major operating system revision, partner sources have said.
OEMs took shipment of the Emerald code in September, according to information shared during a Microsoft system builder chat last month.
The release is expected to include all previous updates for MCE, including those in Rollup 1, and will install only on machines running Media Center Edition 2005 with .NET Framework 1.1 and .NET Framework Service Pack 1.
Based on what Microsoft has said thus far, Rollup Update 2 is expected to be available as a free download and to include support for the Media Center Extender technologies that are being built into Microsofts Xbox 360 gaming consoles.
Several other features will be part of the Update Rollup, sources familiar with Microsofts plans said.
The update will support 200-disc DVD changers that will come to market this fall, and will add a provision for a second high-definition tuner card for handling high-definition video and HDTV signals.
It will also add a new "Away Mode," that will allow Media Center PCs to be shut down and started back up immediately—whereas it takes a few seconds to awake from sleep or hibernate modes—at the touch of a button, the sources said.
Microsoft also is expected to unveil a pack of new partners at this weeks Update Rollup 2 launch. Among them, according to Microsoft partners who asked not to be named, will be Akimbo Systems Inc., America Online Inc., Comedy Central and MTV Networks. America Online is expected to support the platform with photo and on-demand music service, for example. Akimbo and MTV can provide video content to Media Centers.
Microsoft also is expected to add this week a new subsite to its Windows Marketplace shopping portal that will be dedicated to Windows Media Center plug-ins, including one for shopping on eBay Inc.s online auction site. Windows Marketplace is Microsofts one-stop shop for software and services from both Microsoft and third-party providers that support the Windows platform.
Between the raft of new and lower-priced media center models from companies such as Dell Inc., Gateway Inc. and Hewlett-Packard Co., greater availability of Media Center notebooks and the early 2006 launch of Intel Corp.s Viiv brand— the brand will promote high-performance home PCs based on Intels dual-core processors and Microsofts Media Center—in addition to Microsofts forthcoming Windows Vista operating system and other updates, Media Center shipments will rise from less than 5 million this year to top 50 million units in 2009, Roger Kay, president of EndPoint Technologies Associates, wrote in a recent report.
But, despite the expected update, Kay said he believes Microsoft could hold over its best Media Center features for a Media Center-enabled version of Vista Home.
"My guess is Microsofts trying to save as much splash as it can for Vista," Kay said.
Additions such as instant wake-up might "make sense as maintenance release elements. But to create a lot of new features, particularly when [Microsoft] has to come up with another splash for a year from now, doesnt seem like the thing to do," he said, adding that Microsoft should "save as much juice as possible for its long awaited premier operating system."
Microsoft is continuing to work on the next version of Media Center, which most company watchers are expecting to debut in 2006. The new features of the Diamond release are now expected to be folded into Windows Vista, along with Tablet PC functionality.
The Diamond Media Center features could be part of one, if not, two, of the various Vista SKUs that are under consideration by Microsofts marketing department. The Vista Home Premium and Vista Ultimate SKUs would be the most likely candidates.
Click here to read more about the different Vista SKUs.
Microsoft officials have said repeatedly in the past few months that the company has yet to decide on the number, naming or feature set for its Vista line.
A company representative declined to comment on new Media Center features or their schedules.
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