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• CES 2007: The battle for the digital home - analyst opinion

  Get ready for the battle for the digital home: CES and Macworld are just a few days away and both will lure you with new media center devices. Behind the scenes, Apple, Microsoft, Intel, and AMD are assembling the core technologies, but the front end is more interesting: HP, Dell and Apple will be the primary vendors making a run at this new market. Let's have a closer look. Currently, the digital home market is a big mess of offerings with little of the standardization that should define a consumer-oriented market. There is way too much visible technology and the truly good solutions are often defined by the tens of thousands of dollars they cost and massive amount of professional services they require to get installed. The biggest problem has been content, or more accurately, the lack of good content as content owners in response to media pirating have gone down the questionable path of largely punishing people who buy their content because they don't seem to be effective at going after the folks that don't. Movies and Music are the only two things I know of that are actually more valuable if they are obtained illegally than if they are purchased: Illegal content can be used everywhere while legally purchased content comes with so many restrictions that I often wonder why any of us buy it twice. At least with music, you can put it on MP3 players and share it around your home through products like the Sonos system but movies have been problematic. There are heavy restrictions and no real ability to rip them into solutions that could make whole house systems useful; and, not to forget, they are incredibly expensive. There have been subscription services from companies like Vongo, Cinema Now and Microsoft, but the libraries have been pitiful, the HD content largely non-existent and the ability to watch the downloaded film anyplace virtually impossible. Really, if you think about it, these services are more of a curiosity than a solution to date. Apple is the poster child with respect to a high tech vendor who has entered the consumer electronics space and made a killing. This, however, mostly largely happened by beating other technology vendors to the punch - with products the consumer electronics vendors mostly didn't understand. The tragic competitive example was the initial Sony MP3 line, which, physically, was vastly more attractive than Apple's. But its was so difficult to use, largely due to the heavy protections on the media, that virtually no one bought these devices. Today, there are four areas of use for consumer electronics devices - (1) personal (iPod), (2) living room (media center), (3) home distribution (media extenders), and (4) car. And there are five types of media: Audio only (music and podcasts), commercial video (TV and movies), personal video (home movies), photographs, and video games. The winning vendor in the digital home battle will be the one that can cover most of these scenarios in a fashion that is easy, relatively inexpensive and at an acceptable level of reliability. Apple shows the way What I find rather interesting is that, when Apple brought the iPod out, they demonstrated how to present a technology product to a consumer electronics audience. They focused on making the product easy to use, making content easily available, created a solid sexy industrial design and marketed the key product features of "fun" and "semi-exclusive" to an ever growing audience of consumers who even surprised Apple with their incredibly eager response. For years after the launch of the iPod, competing vendors have largely ignored the Apple lesson and focused instead on technology and ignored, in particular, the importance of ease of use and marketing in making a product successful. HP probably came closest to such a product that, however, was never actually launched. The reason we know is that, after Steve Jobs had learned about the product, he called HP CEO Carly Fiorina and convinced her to license his product. Steve implied that HP could actually end up selling more of them than Apple given HP's better retail presence and the firm's potential capability to transcode (get iTunes music to work on their Windows Media Center natively). Of course transcoding wasn't allowed (doing this while protecting the DRM aspect of the file was incredibly difficult anyway) and Jobs denied all requests for custom colors (including black) indicating they were inappropriate for the product. While this deal may come back to haunt Apple during their own iPod anti-trust trial which was disclosed by Apple's board a few days ago (much like similar Microsoft actions did) it did prevent HP from entering and Apple remains predominant. However, one challenger did step up and after doing a deal with Real Networks (Rhapsody) and Best Buy, Sandisk now has 18% of this market and for much of last year was the fastest growing vendor in it. This suggests at least one competing vendor is learning. Best Buy is truly a retailer to watch because they recently brought out a home automation solution in a box which, while too expensive for most, is probably very close to the best you can do with current technology. Still, Apple enters 2007 as the company in the pole position with the best chance of having the next generation of market leading offerings which are expected to include their iTV, their iPod Phone, and media enhancements (including hardware design changes) that make them better products for media in and around the home. Interesting enough, even though Apple doesn't do car audio, they've turned the iPod into a decent automotive accessory and many use it today instead of their nearly obsolete automotive CD changers and players. Even though it isn't particularly elegant as a media distribution solution, Apple's iPod effectively addresses all but the game category of media now and all areas of the home and car through iPod accessories. CES 2007 solutions At CES - and MacWorld - we will be seeing a number of solutions that move media around in the home, on your person, and in your car. The key test will be whether the solutions are comprehensive, easy to use, affordable, and are connected to adequate content. Some of the best offerings you are likely to see will address one or two media types and four of the five areas that you may want to consume media in. A lot of the products you'll see will try to address everything but probably won't do any one thing well enough to be successful (sometimes products that do one thing well like Sonos with music or Tivo for TV will still be best for many of us.) However, there will be one or two vendors who will come very close to getting this right - other than Apple this year. I already got a look into Bill Gates' keynote and he will be attempting (and it is a good attempt!) to catch Apple napping and it won't be until Steve Jobs presents that we will know which CEO was the most successful. Another company to watch is HP as they roll out the most comprehensive set of CE products ever seen from any technology vendor, literally blanketing the digital home. But, whoever wins, make sure the products you get excited about and possibly purchase have access to the content you want. Otherwise, they will just be expensive shelf warmers and many of us already have too many of those. Rob Enderle is principal analyst for the Enderle Group. He can be reached at renderle@enderlegroup.com.

• First of all, the total cost of all components we used in our self-made PC is around $995. We only used components, which we had already tested thoroughly for test reports. Our main aim was to build a very competitive PC at a comparatively low cost, such as you won't be able to find at any PC retailer. Even well known discount retailers such as Dell or Gateway can't compete with Tom's Hardware PC when looking at the price/performance ratio. What is the reason for this, you may ask? Manufacturers such as Dell are attached to certain hardware components so that their systems can stay below those vital price levels. Furthermore, we overclocked the CPU and used a powerful CPU cooler. No PC manufacturer will work that way, as they'd invalidate the component manufacturer's warranty at once. All steps for assembling our PC are documented in detail in the images below. Best Platform: Intel Or AMD? Whoever builds his own PC has to decide on the fundamental processor platform for his/her PC system. We decided in favor of Socket 462 (Socket A), which allows use of all AMD CPUs such as Athlon and Duron. The next decision concerns the motherboard to be used. We chose the Asus A7V, which produced excellent results in many earlier tests . A decisive factor for using this particular board in our PC system was its overclocking capabilities. With Asus A7V, the user may easily change the clock multiplier of a Duron or Athlon CPU by using DIPswitches. The table below lists a few other motherboards that are currently available, which come with a lot of good features as well. Motherboard Platform Chipset Settings for Overclocking Price Abit KT7 Socket A VIA KT133 Core Voltage, FSB $135.00 Asus A7V Socket A VIA KT133 Core Voltage, FSB, Multiplier $145.00 MSI K7T Pro2 Socket A VIA KT133 Core Voltage, FSB $130.00 Note: Socket A is also known as Socket 462 This list shows good motherboards with Socket 462 for AMD Athlon/Duron (Prices as of January 2001). Asus A7V is a good compromise between useful features, stability, upgradeability and performance. Its only disadvantage is the high price tag - the board comes at $145.