Even though June is the time of year for barbeques and baseball, under the surface preparations are under way for the battle that looms during the Christmas shopping season this year.

With networking technology within the home finally ready for prime time, electronics vendors are looking to either bring intelligence into home entertainment devices, or turn PC-like devices into home entertainment hubs.

"Depending on who's talking, the gateway to the home -- the central control hub -- is either going to be PC-focused, or based on the television and the set-top-box," said ABI Research in a recent report looking at consumer electronics trends. 

That was clear in January when companies that have their roots in the computing space, such as Intel and Hewlett-Packard, said they would enter the home entertainment fray with end user products that would hit the shelves in time for Christmas.

"For Intel in 2004, this [consumer electronics] effort will receive as much focus as the work we did last year to advance wireless technologies for mobile computing," said Paul Otellini, Intel's COO, in an address to industry insiders at January's Consumer Electronics show.

Intel made a big splash at the show, unveiling plans to create chips for large-screen projection televisions, announced a new spec to bring CE-quality audio to the PC and revealed the creation of a $200 million venture capital fund for investment in CE companies.

In addition the company unveiled a prototype for a new device Intel calls the Entertainment PC, a PC with a slim form factor, connected to a television screen, intended to serve as the brain of a home entertainment network. The wireless device would offer the functionality CE makers are putting into high-end devices such as combo DVDR/hard drives: DVD and audio CD recording, organization and playing of media content and personal video recorder functionality, among others.

AMD has also alluded to the fact that it is looking at home entertainment as another market for it's 64-bit process.

That pits microprocessor makers and computer makers interested in pursuing home entertainment directly against the players that have grown up in the consumer electronics market.

But whereas CE makers will offer their high-end full function devices in the $300 range, at CES Intel said its Entertainment PC would cost $800. Other computing players are expected to come in at a similar price range to Intel's entry.

"$800 is a high price point for many consumers," said Simon Wegerif, general manager for U.S. consumer businesses at Philips Semiconductors. "Some people will experiment with the Entertainment PC, but mass-market consumer will be more satisfied with [traditional] consumer electronics products."

Indeed, the early adopters may gravitate towards the power of entertainment PCs, despite the price point.  When Tivo debuted the devices sold for above $500, and the new HDTV version of Tivo is reportedly selling well at $999.

However, CE traditionalists are quick to point out other inadequacies in the computing home entertainment plan.

"Consumer entertainment products not only need to be sub-$400 but they also need to meet all consumer needs in terms of capabilities," said Terry Leeder, senior VP and software for CE. "They need to work the moment you press the button on the remote control, and they need to work that way every single day."

Still, computing players recognize a good opportunity when they see it, and are pouring resources into winning success in a booming market. Only when the party is over in January and the numbers come in will they know if it's a viable market for computing platforms.

By: DocMemory
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