IPTV Progress Highlighted at CES

The 2008 Consumer Electronics Show (CES) did not signal any major strategy shifts or reveal significant new products from Microsoft, but rather highlighted its existing lineup of home entertainment products. In particular, Mediaroom—the company’s platform for delivery of TV and other video content over IP networks—is growing rapidly and will surpass 1 million installations in the first quarter of 2008, although a sponsorship-based partner program could make it difficult for ISVs and other third parties to capitalize on this success.

No New Products, Technologies

Unlike recent years, Microsoft announced no new products or technologies at the 2008 CES, although it did showcase some new products from partners. Instead the company demonstrated some products it had introduced since last year’s show, such as Surface and Windows Live Photo Gallery, and highlighted customer and partner interest in technologies that have been around for several years, such as Mediaroom and Xbox Live.

Microsoft’s demonstrations at the show suggested it will continue its current home entertainment strategy of building vertically integrated product lines of hardware, software, and services (e.g., Xbox 360, games, and Xbox Live). In contrast, the company will not focus on integration between product lines—for example, there’s no urgency to integrate the Internet TV service used to download TV content to a Media Center PC with the Xbox Live Video Marketplace used to download TV and movies to the game console. At Microsoft, vertically integrated product lines tend to be much more restrictive to partners than the company’s traditional PC business—for example, the software development programs for Mediaroom, Surface, and the Xbox 360 are all tightly controlled or open by invitation only. While this limits the opportunities for partners to participate, it does provide an early advantage to partners who are accepted.