Ross Rubin: Making Peace With the PC

Had Sharp Electronics shown the film "King Kong" on the 108-inch behemoth LCD television it introduced at the 40th Consumer Electronics Show (CES) earlier this month, attendees might have fled in fear from the enormous lifelike display.

However, Sharp showed something almost as frightening. In addition to the standard high-definition footage of nature, food and lounging women, Sharp displayed a spreadsheet. As it turns out, a 108-inch TV can display enough cells to remedy the California prison shortage, but they don't make for great entertainment. Why, then, would Sharp choose it for a demonstration?

After years of criticizing personal computers as difficult and geeky, both giants and newcomers in the consumer electronics industry are tentatively extending an olive branch to the personal computer as it becomes the repository for digital content such as music and photos, and makes inroads toward video. Gaining access to this content increases the value of products such as televisions and stereo receivers.

PC video content includes Hollywood blockbusters from services such as Vongo, a library of television shows from iTunes, questionable karaoke from YouTube, and of course home movies stored on PCs from a camcorder or digital camera that will soon support high-definition movie capture.

Major networks are now starting to offer episodes or whole seasons of TV shows on the Web, and DVD rental company Netflix is dipping its toes into digital distribution with Web-based video credits tied to how much a consumer spends with the company per month.

In general, companies are taking two routes to the couch -- bring the PC into the living room or gain access to its content across a home network. According to NPD, sales of high-speed home networking routers that can handle high-definition video using the draft 802.11n are now 3.5 percent of the market.

Some consumer electronics giants, such as Sony, Toshiba, Samsung and Panasonic, sell PCs, although Samsung doesn't offer its laptops in the United States and Panasonic has aimed its durable ToughBook line at specialized business markets.

Sony, however, has focused its former "desktop" line on PCs that run Windows Media Center and are designed to connect directly to televisions. At CES, the company introduced a circular white PC designed for lower-budget or space-constrained entertainment centers. Media Center PCs now represent 59 percent of the desktop PC market, but relatively few of them are connected directly to televisions.

Pioneer offers plasma televisions that can gain access to content from a PC, and HP offers the feature in its MediaSmart LCD televisions. Sharp also plans to introduce LCD televisions that can channel such content.

Such functionality helps differentiate flat-panel TVs, which have seen prices fall 13 percent in the past year. Meanwhile, hedging its bets, HP has introduced its Media Vault, essentially a networked hard disk that can serve up video to a television from Internet movie rental company CinemaNow.

Those without a home network-savvy TV need to make use of a digital media adapter. Sling Media, which introduced the Slingbox for moving video from the television to the PC, closed the loop at CES with the SlingCatcher, which connects PCs to televisions. Quartics, a chip company helmed by former Fortune 500 PC company CEO Safi Qureshy, enables ad hoc sharing of video from a PC to a TV.

Microsoft's XBox 360 can also support pictures, music and movies from a PC using Media Center software. And Netgear's Digital Entertainer EVA8000 and Apple's AppleTV will both support high-definition video sharing across a home network. Apple's product includes a hard disk for storing content should there be network problems.

However, PCs aren't and won't be the only options for expanding viewing choice beyond cable and satellite fare. Akimbo, via an RCA device, and Disney's MovieBeam both offer set-top boxes that deliver movies using the Internet and wireless technologies. Akimbo also offers thousands of programming hours of niche content in addition to movies from the Intenet service MovieLink.

At CES, Sony showed off an add-on module for its Bravia televisions that will receive high-definition content directly from the Internet. Even PC stalwart Microsoft showed television delivery direct to the Xbox 360 enabled by IP television, bypassing the PC completely. In a world where televisions have become so thin that they can go nearly anywhere, it's becoming clear that their video sources will soon come from nearly anywhere.

Ross Rubin is director of industry analysis for consumer technology at The NPD Group. www.npd.com

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