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Tech Giants Double Down in Vegas

By Cynthia L. Webb
washingtonpost.com Staff Writer
Thursday, January 6, 2005; 10:20 AM

Microsoft, Hewlett-Packard, TiVo. These are just a few of the thousands of companies looking for the key to your living room, but unlike before, historical competitors are forging partnerships to turn home PCs and other gadgets into all-in-one machines designed with your entertainment in mind.

Digital entertainment is the star of the Consumer Electronics Show in Las Vegas this week "as 2,400 exhibitors vie for attention as they showcase their newest hot products," the Associated Press reported. Among the top brass scheduled to outline their visions of the future are SBC chief executive Ed Whitacre as well as executives from Hewlett-Packard, Intel Corp., and Microsoft, the AP said, noting that Verizon and Time Warner Cable also are expected to announce digital entertainment strategies.
The Associated Press via The Washington Post: Competition Grows For Digital Lifestyle (Registration required)

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"Everyone wants to get into the living room, whether it's Microsoft or the telcos," Forrester Research analyst Ted Schadler told the Associated Press.

Speaking of Microsoft, Bill Gates kicked off the proceedings last night with a speech on the company's digital entertainment plans, as well as alliances it's forging to bring more entertainment to the public through PCs and portable devices.

"The proliferation of digital music players, digital cameras, digital video recording devices and cell phones with an increasing number of functions are all proof that the consumer uses more digital products than ever. Microsoft is involved in all of them, from personalizing your music to saving your memories," the San Jose Mercury News reported. "Gates said Microsoft is forming many partnerships to bring new features to these products for consumers. Some of those partnerships are in the TV arena, where Microsoft and the rest of the personal computer industry seek to turn the PC into the hub server to store all your digital entertainment. But Microsoft faces competition from a number of other big players that are just as determined to lure customers. Hewlett-Packard has launched its own digital television and a digital electronic entertainment center that, combined with Microsoft software, turns a PC into an entertainment center for the living room. Cable TV giant Comcast has begun offering digital video recording on demand, so customers can watch more than 1,500 TV programs and movies whenever they want. In typical Microsoft fashion, the Redmond, Wash., software giant is working with some of its competitors."
San Jose Mercury News: Gates (Registration required)

Microsoft's target, the Wall Street Journal wrote, is Apple. "Microsoft Corp. has watched with envy as Apple Computer Inc. and its slick iPods have stolen the digital-music spotlight. Now the software titan is fighting back. Microsoft is enlisting a raft of new allies for its growing ambitions in digital entertainment -- and even may pursue an alliance with another industry giant galled by Apple's runaway success: Sony Corp. In a speech last night... Gates outlined agreements with Viacom Inc.'s MTV Networks, digital-video-recorder pioneer TiVo Inc., Yahoo Inc. and others to make more music and TV programming available through Microsoft Web sites and on devices using Microsoft software."
The Wall Street Journal: Microsoft Mulls Sony Partnership To Counter iPod's Success (Subscription required)

The San Francisco Chronicle offered a reason for the sudden spirit of sharing amid the competition. "What's driving this newfound detente is the sheer size of the consumer electronics market, which is experiencing explosive growth boosted by new digital entertainment products, including high-definition televisions, digital radios and portable audio players like Apple's iPod. 'You're talking in the trillions of dollars' in revenues for all segments of the consumer electronics industry, said Tim Bajarin, president of Creative Strategies Inc. in Campbell. 'There's no single company that can meet the demands of consumers going forward.''"

But there's no guarantee that Microsoft will rule digital entertainment. "Though Microsoft has poured billions into initiatives to tap the home entertainment market, it has yet to earn a profit in that segment. There's no guarantee this latest plan will work. Computer owners bedeviled by viruses and spyware may be wary of using Windows to tap into online music and video services. 'It's a bit hard to convince a consumer to use a PC as a home entertainment hub when you've got long boot times, and your favorite show might get interrupted to install a security patch,' says Matt Rosoff, tech analyst at research firm Directions on Microsoft," USA Today reported.
San Francisco Chronicle: Team Players
USA Today: Microsoft Builds On Entertainment

Swingers: No Longer Just a Movie

Microsoft isn't only into providing digital entertainment, as it turns out. Gates's speech featured late-night talkshow host Conan O'Brien, as well as a few unintended glitches to keep the Microsoft haters happy. "Gates and O'Brien drew big laughs with a mock photo presentation that supposedly depicted their Tuesday evening activities in Las Vegas. After one photo showed the two downing Bourbon straight from the bottle, O'Brien was next depicted in bed with a prostitute. Equally appalled, Gates was subsequently pictured in bed with an Apple computer." The Seattle Times has more on the act.

Now for the accidental laughs, courtesy of the Associated Press: "[While] promoting what he calls the 'digital lifestyle,' Gates showed how vulnerable all consumers -- even the world's richest man -- are to hardware and software bugs. During a demonstration of digital photography with a soon-to-be-released Nikon camera, a Windows Media Center PC froze and wouldn't respond to Gates' pushing of the remote control. Later in the 90-minute presentation, a product manager demonstrated the ostensible user-friendliness of a video game expected to hit retail stores in April, Forza Motor Sport. But instead of configuring a custom-designed race car, the computer monitor displayed the dreaded 'blue screen of death' and warned, 'out of system memory.' The errors -- which came during what's usually an ode to Microsoft's dominance of the software industry and its increasing control of consumer electronics -- prompted the celebrity host, NBC comedian Conan O'Brien, to quip, 'Who's in charge of Microsoft, anyway?'"
The Associated Press via Forbes.com: Gates Touts 'Digital Lifestyle' In Vegas

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