Digital Home

The Economist writes how “companies are fighting to turn your home into an entertainment multiplex”:

Intel, with a virtual monopoly in the chips that power PCs, naturally hopes that PCs will dominate and morph into media hubs. So does Microsoft, with its near-monopoly on PC operating systems. HP, Gateway, Dell and Apple also want the PC to win, although HP is also big in printers, digital cameras and other consumer gizmos, and Apple has the iPod to fall back on.

On the other side are the giants of consumer electronics. Sony wants future versions of its game consoles, rather than PCs, to play the role of digital hub. TiVo, a leading maker of digital personal video recorders (PVRs), has hopes for its machines. So do makers of TV set-top boxes.

Extrapolating from history, the PC industry would be the favourite to win, since it has the powerful and rich Microsoft on its side. Microsoft is certainly trying. In the past year, it has launched and re-launched its Windows Media Center, a version of its operating system that looks more like a TV menu and can work via a remote control. Microsoft is also pushing its own next-generation DVD technology, that competes with rival technologies from Japan’s Matsushita, NEC, Toshiba and others.

The one thing that all companies seem to agree on is that households will be connected to the internet via a broadband link that is always on, and that content will be shared wirelessly between rooms within the home. The upshot is that there need not be any single device inside the home that becomes a central media hub. A baby picture could be stored on a PC, on a console, or on a mobile-phone handset. Or it might alternatively be kept on a remote and powerful server computer somewhere on the internet. The latter model is how subscribers to Rhapsody, a service provided by RealNetworks, an internet media firm, already listen to music.

The gadget makers therefore have much to ponder. Art Peck, an analyst at Boston Consulting Group, says that the real money in the digital home will be made by those providing a service or selling advertising. The hardware makers, he thinks, are therefore fooling themselves by thinking that any device can become a Trojan horse to enable them to capture the bounty. It is much more likely that they will all end up as makers of interchangeable commodities for the digital home, that the consumer cares little about unless the stuff breaks down.

Published by

Rajesh Jain

An Entrepreneur based in Mumbai, India.