Vendors hope multimedia PCs boost sales

Trying to compete with digital entertainment

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,, 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. 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.

Intel's fastest desktop processor, the 3.06GHz Pentium 4, and its fastest notebook processor, the 2.4GHz Mobile Intel Pentium 4 Processor-M, are featured in the Gateway XL desktop and notebook PCs. The 700S and 700X desktops use the 2.4GHz Pentium 4 and the 2.66GHz Pentium 4, respectively.

"If you're really going to do (video editing), even as an enthusiast, not a professional, you want the top performance to reduce the amount of time you're going to spend doing this work," said Jeff Schindler, director of video solutions for Gateway, based in Poway, California .

To complete the digital video package, consumers who buy a new Gateway Digital Film Maker PC will get $100 off a digital video camcorder from Gateway.

The new Lindows Media Computer isn't designed to create digital media, but allows users to play DVDs, CDs, and MP3s on a PC for under $350 through Medialand Systems Web site. It uses Via Technologies Inc.'s C3 processor and bundles software that lets users access their America Online Inc. e-mail and instant messenger accounts.

LindowsOS is based on the open-source Linux operating system, but contains proprietary code that is not released to the general Linux community. The San Diego company has bundled LindowsOS with PCs from Microtel Computer Systems Inc. and processors from Via for sale on's Web site, and the operating system is also available for download from the Web site.

"Consumers are indifferent to what's under the hood, as long as it works, and they definitely care about price," Kay said.

The new Power Mac G4s cater to the middle of the PC market. Users looking for added performance can purchase a Power Mac with dual PowerPC processors, developed jointly by IBM, Motorola, and Apple. The top model with dual 1.42GHz processors, priced at $2,699, is Apple's fastest desktop PCs yet released, said Greg Joswiak, vice president of hardware product marketing for Apple.

A dual 1.25GHz processor system is available for $1,999, as well as a single 1.0GHz PowerPC model for $1,499. These are new prices for Apple's G4s, which previously cost $1,699, $2,499, and $3,299 for the low-end to high-end base models, Joswiak said. Users can build Apple PCs to order through the Apple Store at the company's Web site.

Apple's historical role in advancing multimedia technologies, such as the DVD burner, is continued with the new Firewire 800 standard, a faster port for downloading digital video content. The top configuration comes with Apple's SuperDrive (DVD-R/CD-RW) drive and iDVD software, which can be added to the other configurations for $200.

The Cupertino, California, company also released a 20-inch flat-panel Apple Cinema display to replace its previous top-end 22-inch display, said Scott Brodrick, line manager for displays. As part of an effort to bring Apple's displays more in line with mainstream pricing, the company is significantly reducing the prices of its displays, he said. The 22-inch display was priced at $2,499, but the new 20-inch display is available for $1,299.

Copyright © 2003 IDG Communications, Inc.

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