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6/29/2006
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Apple's Next Big Thing: Home Entertainment

Sure, the company's on a roll. But does Apple have what it takes to repeat the success of the iPod in this notoriously fragmented venue?

Ease of use is the primary issue: consumers can't be bothered with worrying about interfaces and complicated cables and instructions. "It has to be as easy to use and as reliable as a toaster," says Munster.

"Most people are very dissatisfied with the current offerings, and for that reason would welcome Apple's contribution," says John Gruber, a prominent Apple blogger who runs the Web site Daring Fireball.

A number of major PC, consumer electronics, and software vendors already have outlined their strategy for getting to this media nirvana, notably Microsoft (via Media Center), HP (through its digital entertainment line of PCs), Intel, with its Viiv platform, and Sony and Motorola through its entire portfolios of televisions, consoles, media players, and handsets. But none have managed to circumvent the maze of interconnecting technologies or--most importantly--establish the key partnerships to making this vision a reality for the average consumer.

First, home networks are notoriously difficult to set up. Second, even though standards are being ironed out by the Digital Living Room Alliance (DLRA), network components from one vendor--TVs, digital video recorders (DVRs), set-top boxes, digital media servers, and the various types of players--still won't talk to those from others. Additionally, some vendors believe in a model in which media resides on separate components and is "discovered" while others promote a server-centric view, in which all media would be centrally located, according to Colin Dixon, an analyst at the Diffusion Group.

And then there's the fact that consumers aren't looking to replace what they already have in place. Instead, the majority of them view emerging options for content delivery as supplements, not replacements, to what they already have, according to a recent report by Ipsos Insight.

"The digital home is higher on the priority list of the vendors than on the consumers," says Gary Sasaki, president of new media consulting firm Digdia. "If you ask them, 'would you like to be able to do this?' you'd probably get them to say yes. But if you asked them what they'd been willing to put up with in terms of complexity--and what they'd be willing to pay--that's another matter."

Apple's (Un)Stated Vision For The Home

Apple is definitely behind the pack when it comes to announcing its intentions. The company has yet to define a comprehensive vision for the digital home, and so Apple watchers are--once again--forced to read between the lines. (At the company's annual meeting, when told by a shareholder that everyone was eagerly awaiting the "ultimate media center," Jobs replied only "we hear you loud and clear.")

"Back in January, when Steve Jobs announced the Mac Mini, it was the first time he talked publicly about connecting a computer to your television," points out Ross Rubin, director of industry analysis at NPD Group, which tracks shipments of new media products, including MP3 players, digital media servers, and DVRs.

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