Windows 98 and its support for TV tuner hardware will enable PC companies to offer PC-TV "convergence" features in their systems, yet PC vendor support for these capabilities has so far been lukewarm.
PC companies whose TV-capable systems have met with mixed results are slow to jump on the PC-TV Windows 98 bandwagon, especially as the trend in computers moves more toward inexpensive, scaled-down systems, not high-end multimedia home theaters.
"The top three reasons why people don't buy PC [TVs] is that they have no need, they can't afford it, and they're too complex," said Sean Kaldor, an analyst with International Data Corporation analyst who noted that a narrowly focused, inexpensive device like WebTV is a more attractive consumer product than a high-end, multipurpose PC with television capability.
Vendors like Compaq, Gateway, and Hewlett-Packard will all ship systems with Windows 98, but only Gateway currently offers a system with the necessary TV tuner hardware to support the Windows 98 feature. That high-end system is priced over $3,000.
Compaq and HP both previously offered a system with TV tuner circuitry, and both discontinued the lines after tepid customer response. "[Customers] certainly considered it, and it's on their radar screen," said an HP spokesperson. "But it's all a matter of customer demand."
Microsoft says it doesn't expect most vendors to be shipping systems with TV tuner cards for at least another year. "We're looking forward at what people are going to be doing with PCs over the next year," said Rob Bennett, group product manager for Windows 98. "As [vendors] start building tuner cards into their system, it becomes more of a reality in about one year."
Still, Microsoft has offered discounts on Windows 98 to vendors who support the TV tuner feature, according to some sources, in an attempt to create momentum.
"The tuner capability in Windows 98 is so compelling for Microsoft that they are willing to discount the OS to make sure it goes in," said an industry expert who preferred to remain unnamed.
Because of consumers' past indifference toward traditional PCs with TV tuner cards, many vendors are re-evaluating the traditional PC design as the vehicle for convergence, and instead looking at new-fangled consumer PCs or Digital TVs which incorporate PC features. Compaq may be developing a new PC-TV convergence product for Windows 98 with TV tuner, according to sources.
"The Compaq direction appears to be a much more PC-like experience," said Richard Doherty, an analyst with The Envisioneering Group.
Although Windows CE is being developed as Microsoft's operating system entrant in the emerging set-top computer market, some PC vendors may be lured by the more robust Windows 98 as their convergence platform. Kaldor believes this strategy is misguided.
"The set-tops from WebTV deliver a focused solution, but a computer tries to be so much," he said. "There's a great fear with PC vendors that the more targeted functionality products will compete with the PC market, but TV tuners in PCs have never been a big market. They've never been broadly used, and we think that will continue to be the case."