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Switched On: Thin clients take on slim pickings


Each week Ross Rubin contributes Switched On, a column about technology, multimedia, and digital entertainment:

Microsoft's footprints mark nearly every pathway to the digital living room. On the rich client it offers the software for Media Center PCs with living room-friendly form factors from Sony, Alienware, and a number of companies in the custom installer market. It also sells the hardware for the Xbox 360 -- the best-selling product that can stream content from a PC. On the thin client side, it continues work on its Microsoft TV platform for set-top boxes and offers its own IPTV client of sorts with MSN TV, which can also stream content from a television.

The Xbox 360 was the first Media Center Extender that could stream high-definition content from a Vista PC, raising the question whether Microsoft would bring back third-party Media Center Extenders. After all, the first round of Media Center Extenders released in 2004 by Linksys and also offered under the HP and Dell brands sold poorly, and their video performance was so much of a dog that it had to be rescued from Michael Vick..

Undaunted, Apple went ahead with its own digital media adapter, Apple TV, which used 802.11n and a hard drive to overcome some of the problems associated with previous products. And this month, Microsoft raised the stakes again with a Media Center Extender platform and its first partners Linksys, D-Link and Niveus. HP also announced that it would be supporting Media Center Extender in its MediaSmart televisions. Previously, the PC giant had pursued a more streamlined user interface for getting content from the PC and broadband and had exited the living room PC market earlier this year.

Microsoft believes these products will be more successful this time around for several reasons. Home networks are much more popular now than they were three years ago, with about a quarter of U.S. of consumers having such capabilities. The installed base of Windows Media Center, now included in every copy of Vista Home Premium and Vista Ultimate, is much larger than it was when these living room products were tied to Windows XP, Media Center Edition.

For video, many of Microsoft's launch partners are including dual-channel 802.11n, which provides superior throughput and resistance to interference when compared with the "a" and "g" flavors of 802.11 that were in older products. And CableCARD, which greatly facilitates video recording when used with Media Center PCs, is now a reality, albeit one that hasn't found much favor outside of cable set-top competitors such as Microsoft and TiVo.

However, one fundamental challenge of the first round of Media Center extender market hasn't changed. Unlike with music and photos and despite the efforts of service such as Microsoft-friendly CinemaNow, PCs are still generally not the repository for commercial video in the home, and televisions are still generally the place where consumers want that video. There may indeed now be millions of Media Center PCs out there, but they're too often lacking that particular form of media for which consumers would buy into the Extender ecosystem.

Recognizing this limitation, Microsoft has stepped up with Internet TV, leveraging the video available on MSN and including Arrested Development, the acclaimed comedy available for streaming on the MSN Web site. However, one show is a small carrot in the confusing produce section that is commercial broadband television, one in which the networks have yet to decide which plastic bags of DRM they will enable consumers to use, and how much they will cost.

While the Xbox 360 may be the best-selling Windows Media Center Extender today, it's not the solution for everyone who wants to bring PC-resident content into their main viewing area, and Microsoft cannot hope to reach into other high-volume living room components such as flat-panel televisions, DVRs and disc players of all stripes if it doesn't have a platform to offer them. Ultimately, this may become another familiar case of the tail wagging the dog.

The increased adoption of products that can accommodate PC video over a network, such as the 360 or PlayStation 3, can serve as the video vanguard that will motivate more content providers to make premium content available over broadband and on demand. In this round, Microsoft has brought more to the party, but you'll still need to add your signature to the CableCARD and strike up the dual band.

Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group,. His blog can be read at Views expressed in Switched On are his own.

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