Posted by : Anonymous on Jun 14, 2004 - 11:55 AM Microsoft

Microsoft Corp.'s products are sometimes criticized for leaning too heavily on concepts invented and introduced previously by others. The famous example is the graphical user interface -- developed by Xerox Corp. researchers, popularized by Apple Computer's Macintosh and used by Microsoft to dominate the personal-computer industry with its Windows operating system. But that isn't always the way it works. Apple, in fact, last week unveiled something similar in concept to a product Microsoft announced earlier this year -- but also different in ways that some analysts believe could give Apple an edge.
Dubbed AirTunes, it's a feature of a new Apple product called AirPort Express, housed in a small, white plastic shell that plugs into an electrical outlet and comes with, among other things, a built-in audio port that connects via cable to a stereo or powered speakers.

The product's AirTunes feature creates a wireless connection between the Airport Express and Apple's iTunes music software -- on a Mac or a Windows PC -- letting someone transmit music wirelessly between a computer and a stereo system in the den or living room, or anywhere else within range.

Sound familiar?

Microsoft announced plans in January for software it calls Windows Media Center Extender, housed in set-top devices that will let someone send digital media, including movies and music, from a computer to a television elsewhere in the house.

The extender devices, built around Microsoft software, will come from a variety of hardware makers, working via both wireless and wired connections.

To be sure, no one is saying Apple is mimicking Microsoft in this case. There are big differences in the products, including Microsoft's decision to go beyond audio to accommodate video, and to focus on the television rather than the stereo. In addition, the AirPort Express will come with a number of features aside from AirTunes, such as the ability to serve as a portable wireless base station and print server.

But in terms of business strategy, the similarity between the Media Center Extender devices and AirTunes is notable. Both would effectively extend the companies' respective positions on the personal computer into the living room -- something that Microsoft, in particular, has long been seeking to do.

The lure of the living room is proving irresistible to companies that have historically been focused on the computer, in part because it represents an opportunity to tap a larger market, said Josh Bernoff, Forrester Research principal analyst.

The effort to bridge the computer and the living room makes sense in another way, as well, analysts said. Although the computer has turned into a place where many consumers store and organize digital music, it's not necessarily the place in the home where people want to listen to their music.

That bodes well for Apple's music-centered wireless initiative.
But Bernoff questioned whether there will be as much consumer demand to use the computer to deliver video over a home network to the television.

One reason: Although Windows-based Media Center PCs include TV tuners and digital video recorders, the state of digital movies and television on the computer isn't as advanced as that of digital music.

"Most of the desire to watch video on your TV is being satisfied very well by your cable and satellite company already," Bernoff said.

Yet Microsoft and Apple aren't the only companies looking at new ways to get digital media into the living room. TiVo Inc., maker of the popular line of digital video recorders, said last week that it is working on a method to let people download media content from the Internet to the hard drives of their TiVo boxes, adding to the programming available for viewing on their TV screens.

At the same time, research shows that one of consumers' top priorities for their broadband networks is the ability to take digital music from their computers and listen to it on a home stereo system, said Joe Wilcox, analyst at Jupiter Research.

"From that perspective, Apple is right on target," Wilcox said. "What Apple has done, instead of trying to chew off everything, is taken a little bite here, a little mouthful, which is the music. ... It also happens, I'm sure not by coincidence, to be what people want."

Microsoft, in moving forward with its initiative to move both audio and video over the home network, "has taken the big bite," Wilcox said. "The question is, will it be too much at once? Can they really deliver on the promise of the technology?"

For example, one of the main benefits touted by Microsoft is the ability to use a Media Center Extender device to send video to a television from a computer over a home network even if someone else is using the same computer for other things at the same time. Wilcox said he wonders whether the underlying Windows XP operating system will truly be robust enough to handle all that activity.

And Apple may have another, more basic advantage: Although Microsoft was first to unveil its technology, it doesn't look like it will be the first to get it to market. The Redmond company has said it expects the first Media Center Extender devices to be in stores in time for the upcoming holiday season.

Apple says its AirPort Express will ship next month.

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