Get ready for the personal computer's second act -- the part where the PC abandons its staid office life and hooks up with the living room's TV thanks to the transformative powers of
new Viiv platform.
Like a good made-for-TV drama, this tale has a back story. For Intel, it goes back to 1996, when the chipmaker took its first stab at marrying the computer and the television with a service called Intercast.
Consumers with Intercast-enabled PCs could watch television on their computer monitors while simultaneously receiving a stream of related data (say a baseball player's stats) broadcast over the portion of the airwaves that transmits closed caption information.
Intel enlisted a slew of broadcasters to offer enhanced Intercast programming, including NBC, MTV, CNN and PBS. But the service never caught on with consumers and quietly faded away.
Intel isn't the only hardware company with skeletons in the closet of the digital living room. In the late 1990s,
and Compaq (now part of
) each peddled clumsy hybrids of giant picture-tube televisions and desktop computers dubbed PCTVs with price tags that kept them out of reach of most consumers.
As the memory of these past missteps grows more distant, the PC industry is once again eyeing the living room. This time, many tech companies argue, the stage is set for a more favorable outcome.
"The world is a pretty different place now," says Michael Gartenberg, the director of research at JupiterResearch.
With broadband Internet connections, wireless home networking and digital content all readily available today, the time is right for the PC to evolve from an office-bound productivity tool to a legitimate home entertainment appliance.
"We saw a lot of the early seeds planted in the past couple of years," Gartenberg says. "In 2006, this is where this is going to go from the early enthusiast to the mainstream."
And with sales of desktop PCs slowing, the advent of the digital living room could be just the thing to reinvigorate the industry. Intel, the world's No. 1 maker of processors for PCs, is taking a lead role in the effort.
In Viiv, Intel has combined all the necessary ingredients -- including microprocessors, high-speed networking, digital surround sound and software -- for PC makers to offer a complete home entertainment experience. Consumers who own a Viiv-based PC will be able to effortlessly link their PCs to the television, and use a remote control to access their digital photos, music and videos.
At the same time, Intel has put a great deal of effort into creating what it calls an "ecosystem" of content and services. ESPN and NBC will each offer exclusive, high-definition sports clips for Viiv PC owners to watch. International media firms will serve up hard-to-find Bollywood films and Spanish-language soaps. And
America Online will offer access to a vast archive of old television shows, as well as delivering online streams of
XM Satellite Radio's
"It's similar to a DVD player," says Merlin Kister, Intel's Viiv technology program manager. "No one bought a DVD player until there were DVDs to buy -- you need the content."
Appealing as all this content may be, not everyone is convinced it's revolutionary enough to entice consumers to plunk down the thousand dollars or more that many of these Viiv home entertainment systems will cost.
"You're asking the consumer to say 'Yes, it is worth it to go out and buy another computer,'" says Invictus Funds analyst David Schamens. "I don't think the technology is compelling enough for the consumer to really understand why he needs this."
What's missing is the so-called "killer app," the application that will make living room PCs irresistible to mainstream consumers, says Schamens.
But proponents of the digital living room argue that the killer app is the unprecedented wealth of digital content -- from high-definition videos and movies, to MP3 music and snapshots taken with digital cameras -- all instantly accessible at the touch of a remote control. After all,
iPod has proven that consumers are hungry for new types of devices that let them take advantage of their growing collections of digital content.
Still, while JupiterResearch's Gartenberg is optimistic about the prospects of the new breed of home entertainment PCs, he acknowledges that the onus will be on PC makers to push the design envelope if they hope to succeed.
"If vendors are just building beige boxes that's not going to do it," says Gartenberg.
According to Intel's Kister, the company's engineers spent a great deal of time working with PC manufacturers to come up with quieter, sleeker PC designs that won't be out of place in the living room.
For now though, the big PC makers appear unwilling to stick their necks out with something as unproven as a living-room PC. Despite the sleek, VCR-like computers exhibited in Intel's catalog of Viiv reference designs, many of the big players, like H-P and Gateway, are only introducing Viiv PCs in old-fashioned desktop tower designs.
The average consumer still doesn't understand the value of buying a new PC to put in the living room, says Todd Titera, senior manager of desktop products at Gateway. The PC maker will offer Viiv on high-end desktops geared toward people looking for a main, home-office computer. Gateway's home-entertainment push focuses more on low-priced, non-Viiv desktops with slimed-down versions of
"Our goal is to really introduce this value proposition to customers at mainstream price points," says Titera. "Introducing these concepts to people will get them to start understanding what this could mean. And then the next stop could be a living room PC."
H-P, one of the more innovative companies when it comes to PC design, has an existing living room-appliance-like PC available dubbed the Digital Entertainment Center. But rather than introduce a Viiv version of that product at this month's Consumer Electronics Show, H-P also opted to introduce its first Viiv systems in traditional desktops.
What's more, the company made its biggest home entertainment splash at the CES show by announcing a new 37-inch flat screen television that can connect wirelessly to a person's existing PC.
High-tech digital media appliances may have the cool-factor, but to make money in the home entertainment market there's still nothing like selling televisions.