The personal computer's slow evolution from work tool to consumer plaything took a big step yesterday, with the world's biggest software company and several major computer makers simultaneously announcing new entertainment-centric machines and software.
Microsoft led the new product parade, unveiling an updated software platform built specifically to transform PCs into home entertainment centers.
Computers running the new Windows XP Media Center Edition 2004 platform can do everything typical Windows-based machines do today -- word processing, Internet access and spreadsheets, for instance. But it also comes with built-in software for watching and recording television shows, downloading and playing movies and listening to music -- whether from CDs, the Internet or a radio station on the other side of the country.
Seeking a way to improve the reliability of Windows, BIOS maker Phoenix Technologies LLC and Microsoft on Tuesday announced an agreement to develop device-level management services for future versions of the Windows OS.
The deal will tie together the Phoenix "Core" BIOS software more closely to the Microsoft OS. These forthcoming services will deliver more, sophisticated information about the state of a system to Windows and give IT managers a clearer picture of the current state of the machine, the companies said.
For millions of consumers at home and at work, using a computer means using Microsoft. Its Windows operating system powers more than 90 percent of the world's personal computers. Its programs for Internet surfing, word processing and spreadsheet calculations barely have competition. It is aggressively pushing into online gaming, entertainment and corporate systems. So why is chief executive Steven A. Ballmer demanding that his troops rethink everything?
In the more than three years since Ballmer took over day-to-day control from Bill Gates, the company has responded by overhauling its structure to force improved financial performance. It issued a modest dividend in January and then recently doubled it, hoping to make the stock more attractive to investors.
Microsoft, which has weathered some stormy channel waters this past year, remains committed to investing $1.5 billion annually to bolster its partner programs and processes, company executives said Tuesday.
"We are committed to being the best in class [in partnering]. Our $1.5 billion investment in the channel is the largest in the industry, and we are committed to continuing it," said Allison Watson, vice president of worldwide partner sales and marketing.
That figure includes support, training, account management, reward programs, relationship programs and salaries for 2,500 Microsoft channel-related employees, 800 of which were added in the last year, Watson said.
Sun Microsystems shares dropped nearly 16 percent on Tuesday, after the company issued a financial warning that sparked concern that the struggling computer maker has lost more market share. Sun said on Monday after the market closed that it would report a wider-than-expected loss for the fiscal first quarter ending this month.
Sun did not provide a reason for the earnings shortfall, citing only "intense market and competitive dynamics," but analysts said the company has suffered from a price war and has likely built on a string of market share losses.
On Monday digital media player maker MusicMatch quietly launched a new digital music download service that rivals Apple's iTunes Music Store but runs on Windows. Like Apple's service, MusicMatch Downloads offers users 99 cent song downloads and full albums for $9.99. The service also offers digital rights management features that are virtually identical to those offered by iTunes, making it much easier on consumers than rival Windows services such as BuyMusic.com. But MusicMatch Downloads has some unique advantages over rival services, such as higher-quality downloadable songs than the competition.
After years of being relegated to the office, the PC is making a new case for why it should be allowed to stay in the living room. A key proponent in recent months has been Microsoft, whose Media Center edition of Windows XP turns a PC into a device that can play music or movies, record TV shows and show photos, all while being controlled via remote control. On Tuesday, Microsoft will try to bolster its position, offering an updated version of the software and new services, accompanied by a broader array of desktops and laptops that use the operating system.
Microsoft will give PDC attendees the scoop on Avalon, the little talked about engine underlying the Longhorn user interface. Microsoft has described the technology as "a brand new client platform for building smart, connected, media rich applications in Longhorn." Developers at the show will be told how to take advantage of Avalon in their applications.
Thanks to Avalon, Longhorn will support new styles of user interfaces and user interface elements. Developers will be able to create Windows client applications that use the type of navigation features found on the Web to browse through information, according to the PDC session calendar.
Microsoft plans in the coming weeks to file a written response to European Union charges that it abused its monopoly in the operating system market, according to sources familiar with the matter.
A hearing has been tentatively set for November, at which time the Redmond, Wash., software giant is expected to give oral testimony before the commission, the sources said. The move is a sign that the 4-year-old investigation by European regulators is getting closer to a final resolution.
At its Professional Developers Conference next month, Microsoft has more in store for attendees than just Longhorn. Microsoft developers are rushing to put the finishing touches on more than just its next-generation Windows client to debut at its Professional Developers Conference (PDC) in late October.
In addition to delivering a technical preview release of Longhorn, Microsoft also is hoping to be able to provide attendees with a first beta of its "Whidbey" Visual Studio tool suite release. Whidbey went to a select group of alpha testers this summer. Microsoft is hoping to deliver the final Whidbey code in the latter half of 2004.