Intel, Microsoft join forces for entertainment PCs

The partnership, which has been building over the past couple of years, is a recognition by the two companies that it is hard work allowing consumers to easily get the kind of programs they want.

"This stuff doesn't just happen," Don MacDonald, Digital Home Group vice president at Intel, said Tuesday in a telephone interview ahead of the Consumer Electronics Show (CES) in Las Vegas. "You can't just have one company trying to do everything."

For several years, Microsoft promoted its Windows XP Media Center edition software while Intel touted a similar PC concept it called the Entertainment PC. In many cases, the entertainment PCs that came to market used Microsoft's operating system, but early efforts were said to be too complex and some people complained about video quality and other issues.

It has also been difficult, in many cases, for consumers to get their television programming to work on their PCs. Media Center PCs typically must be added, in addition to a satellite or cable set-top box. Even then, such computers haven't supported the high-definition broadcasts that are popular among the hard-core enthusiasts prone to spending big bucks on their living room set-up.

"That was fine for the geeks and early adopters of a couple of years ago," MacDonald said, adding that the average consumer can't be expected to have an engineering degree.

But, he insists, much work has been done to make entertainment computers easier to use. Intel has launched a new brand, Viiv, that labels PCs containing Intel chips, Microsoft's Media Center OS and other components that have been tested to work together. The first Viiv-labeled PCs are expected later this quarter.

"Most people don't know how good this experience is," he said. "Once they taste it, we know they will never give it up."

Chip rival Advanced Micro Devices also has announced plans for its own entertainment PC brand, Live.

Work has also been done to shore up the content that consumers want to view. Microsoft has announced that by this year's holiday season, consumers will be able to watch digital cable--both standard and high-definition--on PCs without getting a separate set-top box. The company is also announcing a pact with DirecTV on Thursday that will allow subscribers of satellite TV service to move content onto their Windows PCs, as well as other devices running Microsoft software. Intel, meanwhile, has been inking content deals too.

Microsoft has already started to see an upswing in sales of PCs running its Media Center OS, though many are still used only as traditional desktops outside the living room. After selling just 2 million such PCs in the first couple of years after its launch in the fall of 2002, Microsoft says it has now sold 6.5 million Media Center PCs, including 2.5 million since October.

"Timing is everything," MacDonald said, noting that the combined effort comes just as many homes are getting the high-speed connections and home networks needed to take advantage of such computers.

Viewing TV on computers is still a foreign concept to most Americans, where few of the PCs sold have TV tuners. But MacDonald noted that in some countries such use is commonplace. In Japan, four in five consumer PCs have TV-viewing abilities, he said, adding that roughly half of computers sold for the home have TV tuners built in.

Microsoft said it is also seeing growth in software written specifically to be run on Media Centers using only a remote control. Some 110 such programs are now up and running, including five new ones this week with titles from MTV, VH1, Comedy Central and others. Showtime is also launching a service that will expand on the programs it is showing on its main channel, offering things akin to the "bonus features" that often accompany a DVD.

Joe Belfiore, corporate vice president of Microsoft's Windows eHome Division, said that unlike past efforts, the latest programs look more like TV channels. As soon as someone clicks to launch Motherload, the new Comedy Central program, the video starts playing, but consumers can also tap the remote control and choose other videos instead.

"You can choose clips from 'The Daily Show' or 'The Colbert Report,'" Belfiore said, referring to two popular Comedy Central programs. "It's free. You can queue up what you want."