Introduction

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 the PC in this role.

The main goal of this strategy is to increase sales of Windows. Just as demand for Web access and e-mail created a huge spike in consumer PC demand in the mid-1990s, Microsoft hopes that new entertainment scenarios will spur consumer PC sales, particularly because working with audio and video requires significant processing power, memory, storage, and other hardware (graphics cards, soundcards, speakers, microphones, and so on) that will require most users to buy a new PC. Microsoft also expects to earn royalties by licensing and selling its digital media technologies to partners, particularly device manufacturers and content distributors.