Vendors hope multimedia PCs boost sales

By Tom Krazit

BOSTON -- The struggle for control of the living room has traditionally focused on who gets the television remote control. But technology vendors are increasingly focused on making their products the center of next-generation home entertainment, and three very different PC vendors stated their cases Tuesday with the introduction of new models tailored for multimedia applications.

Gateway, Lindows.com, and Apple Computer all released new models catering to a wide variety of audiences. Gateway's three new desktops and new notebook feature Microsoft's Windows XP operating system and Intel Corp.'s processors in high-end Digital Film Maker PCs. Lindows.com is partnering with Medialand Systems Inc. to bring the Linux-based Lindows operating system to consumers in a media PC priced under $350. And Apple's loyal customer base will have three new Power Mac G4s to choose from, including two dual-processor models.

The recent Consumer Electronics Show in Las Vegas crystallized a trend that has been growing for some time: the emergence of PCs with sharp displays and multimedia CD and DVD drives as a viable competitor to digital entertainment devices. At the same time, consumer electronics devices are adding computing power to better compete in the entertainment market.

Consumer electronics companies generally operate on thinner margins than PC vendors, but don't understand the emerging technologies as well, said Rob Enderle, research fellow at Giga Information Group in Santa Clara, California . The PC vendors are able to identify and incorporate those emerging technologies faster than their consumer electronics counterparts, but at a higher price, he said.

Early adopters are usually willing to pay a premium for new technologies, but the current economic situation colors that strategy, Enderle said. "It's a tough year to bring out a product like this, but you only have the time you're allotted. If you wait, the technology will have moved," he said.

Beleaguered PC companies have claimed they are satisfied with the sales of PCs that use Microsoft's Windows XP Media Center Edition operating system, said Roger Kay, director of client computing at market research firm IDC in Framingham, Massachusetts . (IDC is a division of International Data Group, parent company of IDG News Service.) However, not enough data is available yet to say whether the idea has been a success, he said.

Companies such as Gateway and Hewlett-Packard Co. launched Media Center PCs to coincide with the launch of Media Center Edition in late October.

However, none of the new Gateway Digital Film Maker PCs use the operating system. The company essentially took three of its 700 series desktops and its 600XL notebook and added media features such as DVD editing software from Pinnacle Systems Inc. The 700XL is the top of the line system, with two 18-inch flat panel displays for separate editing and playback functions, a DVD-RAM/DVD-R/CD-RW drive, and a hefty price tag of $4,199.