Gates Launches New Era with XP Media Center 2005

"Today, the dream of digital entertainment becomes a reality," Gates said. "People want to choose how and where they enjoy their digital media, and to easily customize their digital entertainment experiences."

Media Center 2005 is designed to accommodate those desires. The Windows XP Professional update offers users an all-in-one system that takes the place of a DVD player, digital VCR, stereo and TV. With the moniker Symphony, the new software has wooed a long list of hardware partners, including Dell (Nasdaq: DELL) , Gateway, HP (NYSE: HPQ) , Sony (NYSE: SNE) and Toshiba, and various digital media partners, including America Online, Atari and CinemaNow.

Gates unveiled a variety of portable music players, including the Creative Zen Micro, the iRiver 320 and the Samsung YH-820 -- all offering seamless integration with Windows Media Player 10 and the ability for consumers to take portable subscription music with them on the go.

Fundamental Change

Gates also announced the first two Windows Mobile-based devices that come equipped with Windows Media Player 10 Mobile: the Audiovox SMT5600 Smartphone from AT&T Wireless and the Dell Axim X50 Pocket PC.

"Dell's comprehensive Media Center Edition 2005 offerings are fundamentally changing the way customers use their PCs for entertainment," said John Medica, senior vice president and general manager, Dell Product Group. "Our belief is that digital convergence in the home is here to stay, and we're committed to leading the effort to give customers more choice with their digital home products than ever before."

Finally, Gates showcased the new Samsung YH-999 Portable Media Center, which allows people to take their recorded television, music, videos and photos with them wherever they go with Windows Mobile software.

Wading Through the Hype

Despite the hype, the first two versions of Microsoft's Media Center haven't exactly posted record-breaking sales. And even with the latest update, IDC still downgraded its forecast of Media Center PCs from 1.5 million to 550,000 in 2004.

Part of the challenge is price. Some of it is plain old consumer acceptance of a new technology. And the rest of it, once again, is price. PC entertainment convergence requires broadband connections, home wireless networks, fast PCs and an appropriate television and home audio infrastructure -- and that isn't cheap.

"PC entertainment convergence is about building an infrastructure and an ecosystem in your house and, frankly, that's pretty expensive," Stephen Baker, the director of industry analysis at the NPD Group, told the E-Commerce Times.

"Media Center is just not an off-the-shelf kind of concept for the masses yet. And that's OK. I'd rather these things start to build some momentum as the infrastructure is in place for people to use them."

The question is, will it ever be a concept for the masses? While the concept is sound and the usage model is developed, Baker said Media PCs will probably not ever be a huge percentage of the marketplace. If a household already has one Media Center PC, he reasoned, then there's no reason to invest in a second one.

Competition Factor

Then there's the competition factor. Sony, for example, may be cooperating with Microsoft -- for now. But how long the rosy relationship will last remains to be seen. After all, Sony does rule the living room roost in many respects with its entertainment products.

"On the other hand, if there's a huge demand for PC entertainment convergence, then it could boost not only Sony's PC sales, but its camcorder sales and its five-panel television sales and maybe some of its home audio sales," Baker said. "But there's still a lot of cable companies out there who don't want to see this happen."

Microsoft's chief software architect, for one, is convinced. "Windows XP Media Center Edition 2005 is at the heart of Microsoft's vision to offer people around the world the best in complete, connected entertainment experiences," Gates said. "Together with our partners, we are truly revolutionizing digital entertainment on the PC."