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Commentary: Taking entertainment home

Microsoft is betting that the low cost of PC hardware, coupled with Windows XP, will place the PC at the center of the consumer world.

By Michael Silver, Gartner Analyst

Microsoft is starting to reach the saturation point with its flagship enterprise products such as Office and client-side Windows. Consequently, the consumer market has become very attractive to Microsoft to maintain or potentially increase revenue growth.

Microsoft's consumer strategy is evolving and, not surprisingly, the Windows PC is beginning to take on a more central role. Microsoft is betting that the low cost of PC hardware, coupled with the first more-reliable consumer Windows operating system--Windows XP--will place the PC at the center of the consumer world.

Although proof-of-concept products, Microsoft's Freestyle and Mira have the potential to reach a broad audience as the technology matures and new versions are released.

With Mira, Microsoft aims to move Web browsing away from the plugged-in PC and into any room in a home. Yet the first version of Mira will restrict Web browsing to one user at a time and won't include streaming video capabilities. These drawbacks may initially limit the product's appeal. Gartner believes Microsoft will likely introduce its second version of Mira by the end of 2003, complete with support for multiple users and streaming video.

The upcoming Freestyle software product will allow a PC to function as a home entertainment center. The product will include a new user interface, complete with a remote control.

However, using a Freestyle PC as an entertainment hub may raise some interesting space and aesthetic questions. Since Freestyle PCs initially won't support wireless networking, consumers will have to place the product close to the television or stereo. Most users also probably won't want a tangle of PC cables crowding their living rooms. Because of this, Gartner believes that Microsoft may have a tough time placing Freestyle PCs in the living room; better success might be found in the bedroom or dormitory room.

See news story:
PCs: Redefining "entertainment"
To reiterate, the consumer market is important to Microsoft as an area for growth as the company's traditional markets become increasingly saturated. Microsoft's Freestyle and Mira should have the potential to reach a broader audience once later versions are ready for the market.

Microsoft's consumer strategy increasingly will have a significant effect on how it develops and packages future versions of the Windows client operating system.

(For related commentary on Microsoft, see gartner.com.)

Entire contents, Copyright © 2002 Gartner, Inc. All rights reserved. The information contained herein represents Gartner's initial commentary and analysis and has been obtained from sources believed to be reliable. Positions taken are subject to change as more information becomes available and further analysis is undertaken. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of the information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof.