The potential has always been there, all it took were lower costs, easy to use human interfaces, and software - that is, the Infotainment PC. Intel, Microsoft and leading PC manufacturers are about to provide the "all singing, all dancing" living-room PC. When component density doubles every 18 months - and prices could drop accordingly - manufacturers scramble to add features.

This time they've play a trump card - making the PC the "hub" for a host of entertainment media while continuing to run PC applications and connect to the Internet. I would not want to be the marketing manager for TiVo. Most TiVo functions will be available on Entertainment PCs, and at a $800 cost, the future for TiVo does not look good.

We must ask, how many single media device vendors will survive as all entertainment and computer media converge into these highly integrated, multi-function devices?

The following article confirms yet another set of "convergences", a significant cost take out, and a set of new living room designs.

How far away are most of these features on a hand held? 2 years?

ed.

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PluggedIn: PC Makers Try Again with TV Computers

Tue Mar 2, 1:08 PM ET

By Daniel Sorid

SAN FRANCISCO (Reuters) - Despite the best marketing efforts of big technology companies, personal computers have never felt much at home in the living room.

But a new PC makeover by the likes of Intel and Gateway could soon give the home computer a central role in the way consumers watch television and listen to music.

The device, which Intel calls the Entertainment PC, is designed to connect directly to the television, and will look more like a souped-up DVD player than a personal computer. Entertainment PCs could be on the shelves as early as the second half of this year, starting at $799.

Controlled with a remote, the Entertainment PC can flip through and record television channels, play music and movies, and even connect to the Internet to download shows and songs not available from cable or satellite TV operators.

Moreover, it can stream video from the living room to a PC elsewhere in the home, or even to a wirelessly connected handheld device.

"One PC replaces a whole stack of CE," or consumer electronics, "equipment," said Louis Burns, an Intel Corp.(NasdaqNM:INTC - news) vice president who directs the world's largest chip maker's consumer electronics initiatives.

With the growth of PC sales slowing, Intel and the large computer companies are once again focused on the living room, where several separate devices dominate home entertainment systems.

Instead of the DVD player sitting atop the stereo atop theTiVo (news - web sites), the Entertainment PC is designed to replace them all. That's the idea.

It's not a new concept, and PC brands like Gateway and Compaq have fallen flat on their faces trying to push the same idea in years past.

But Intel has its chips on a big bet: that PCs, running a special version of Microsoft Windows, can replace a pile of consumer electronics devices at a significantly lower price, and at the same time add new features.

The Entertainment PC represents the core of that initiative. New Intel chips allow surround-sound audio and integrated wireless networking abilities. A version Intel expects to be sold next year, code-named Sandow, includes a high-definition TV tuner, a smaller form factor, and software to aggregate media from multiple PCs in the home.

Jay Srivasta, an analyst at iSuppli, said Dell and Gateway's success with electronics like digital cameras and television sets suggests that their consumer electronics ambitions are on track. But, he wrote in a recent note, "the road won't be smooth for either of these U.S. companies."

"Whether they are able to capitalize on their success in the PC world and translate such expertise into penetrating the consumer electronics market remains to be seen," Srivasta wrote.

THE FAMILY ROOM PC

Gateway Inc. (NYSE:GTW - news), the PC company farthest ahead in selling home entertainment electronics, late last year began selling an early version of a TV-connected computer, though it lacks some of the features that Intel has written into its Entertainment PC design.

The Gateway Family Room Media Center PC, otherwise known as the FMC-901, won an "editor's choice" award from PC Magazine, which called it "an appealing choice" for people who want the features of a PC "but don't want something that looks like a PC in your entertainment center."

The $999 PC has a TV tuner and a powerful video card, as well as ports and memory card readers to connect game controllers and cameras. It can play DVDs, record television shows onto a hard drive and play MP3 music. The PC can be controlled with a remote, but also comes with a wireless keyboard and mouse.

For avid Gateway followers, a computer that connects to a TV could bring on flashbacks of failure. In 1997, Gateway tried a similar idea with its Destination Big Screen PC/TV, which cost nearly $5,000. Compaq, now part of Hewlett-Packard, had a similar concept with its PC Theater, but it too fell flat.

Gateway says its computers now have enough horsepower to serve as the hub of the home entertainment system, and the Windows Media Center software is refined enough to make it easy to use. The computer runs quietly and cool, Gateway says, and can interact with online media services like the new Napster (news - web sites) to bring online media directly to the living room.

"The PC, I think, will play the role largely as the hub or centralized storage point for all of that content," whether it be music, movies, video games or television, said Philip Osako, Gateway's vice president for alternate form-factor computers.

"Once people understand the concept and see it in action, they're surprised at how easy it is," he said.

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