The following is the full text of an article published by Directions on Microsoft, an independent research firm focused exclusively on Microsoft strategy & technology. Each month we make one or more key articles available to non-subscribers.
To establish the Windows PC as the hub of home entertainment, Microsoft
is building technologies into Windows that improve the PC's ability to work with digital
audio and video (digital media). The company and its partners are also creating a
wide variety of entertainment products and services, from portable audio players to online
music stores, that support this role for the PC. If successful, the strategy will help PC
manufacturers by shortening hardware upgrade cycles, and content owners could gain a new,
lower-cost distribution channel. For consumer electronics manufacturers, Microsoft’s
plans present both an opportunity to sell new types of devices and a threat of
commoditization.
This report will help hardware manufacturers, content owners, and
consumer electronics companies understand the threats and opportunities posed by
Microsoft's home entertainment strategy, with a particular focus on digital media. It will
explain the underlying technologies and strategic reasoning behind Microsoft's digital
media products and services, including the wave of products released in late 2004, and
will identify likely directions for the future.
