PC Center of the Home Ent Universe... Not!

http://www.tdgresearch.com/tdg_opinions_pc-center-of-home-entertainment.htm

The PC is the Center of the Home Entertainment Universe...NOT

Michael Greeson, Co-Founder, The Diffusion Group

March 29, 2007

Invited to the Conversation

I've had the privilege of working with the leviathans of consumer technology. In different respects, each of them afforded me the opportunity to be what I am (a contrarian, a fly in the ointment) and for that I am eternally grateful.

It is comforting that in many cases these companies embraced my advice, while other times not so much. Oh, well - no harm, no foul. Such is the life of an advisor. Again, I'm just grateful to have been invited to join the conversation.

Act I: Counsel Offered

Some five years ago, many Silicon Valley leaders believed that the PC would become the center of the home entertainment universe. I vehemently disagreed with this position, arguing that regardless of market push or the craftiness of media campaigns, the PC as we know and love it would never become the media hub and gateway of the home (and for a variety of reasons which have proven out).

Act II: Counsel Rejected

Needless to say, my opinion was inconsistent with the received wisdom of the day, a view which held that the home PC would evolve into an uber device destined to displace the platforms and brands of consumer electronics to which consumers have long been accustomed. It was, after all, the rightful heritage of PCs to trump CE. With its superior storage, processing power, and consumer-friendly interfaces, who could doubt its appeal as a media platform?

Me, for one - but at that time (and in that environment) it was a lonely position to hold. The corporate momentum behind the PC-as-media-hub effort was unstoppable.

Act III: A Lesson Learned the Hard Way

Several years (and a hundred millions dollars) later, these same technology companies have come to see the truth of my argument. But it has proven to be an inconvenient and expensive truth.

Take Intel's Viiv campaign, for example. While originally heralded as the core brand and platform for a robust connected ecosystem vision, Viiv is now just a simple PC processor platform. AMD's Live campaign is faring no better. One could argue that media-centric PCs are not that compelling to mainstream consumers, especially as a stand-alone product. Sales of these platforms are by-and-large due to the fact that media-centric features are standard on many mainstream PCs, not because consumers are looking for a PC built specifically to manage their home media.

As reported in the last few days, several key OEMs are backing away from the media-center PC business, a sure sign that neither the concept nor the technology is proving particularly compelling to consumers1. For many readers, this is not at all surprising. Yet for some of the world's most respected technology vendors, it is. And therein lay the real disappointment: they knew better.

Act IV: Renewal

One of the great things about the technology industry is that the blinding pace at which new products and innovations are introduced can often overshadow the most recent setbacks.

In the case of Intel's Viiv campaign, it has fallen far short of its original ambitions. Despite this fact (or maybe because of it), the company is in the midst of major re-branding effort (think "multiplicity" and dual cores) and, under the leadership of Eric Kim, the digital home team is developing post-Viiv strategies built on the belief that while the PC is not the center of the home entertainment universe, it will play an important media role in the connected home. This repositioning should serve Intel and its partners quite well.

No doubt Microsoft and Intel - as well as PC OEMS such as HP and Dell - will continue to emphasize the media functionality of their solutions. Whether its digital music, video, or gaming, the PC is and will continue to be used for a variety of rich media experiences. However, media functionality will no longer be heralded as the manifest destiny of the home PC. It will be but one of the many compelling features of the modern personal computer.

I just wish they'd have listened a little more closely five years ago...

ENDS

1"PC Media Centre in Trouble as HP Quits," Smarthouse News, March 28

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