Viiv damaged media centre PC sales, says Altech

By Matthew Henry

HUNTER VALLEY: The launch of Intel’s Viiv platform caused sales of media centre-style PCs to plummet but failed to fill the gap, leading to an overall decline in media centre PC market through the middle of this year, according to Altech Computers national sales manager, Kevin Hartin.

Hartin, whose company distributes PC hardware and software throughout Australia, told media delegates at the MediaConnect Influence 2006 conference at the Hunter Valley this morning that sales of PCs with media centre-style functionality were cut by two-thirds in May following Intel’s April Viiv launch, despite the hype generated by Intel about its new entertainment PC platform.

“Viiv has been the best and the worst thing to happen to the media centre market,” said Hartin. “Firstly, it was the best thing because one of the major stakeholders was finally spending money on marketing. But it was also the worst thing because Viiv killed the market for media centre.”

Media centre PCs are designed to integrate a user’s home audio visual entertainment and personal computing needs into the one box, providing software and hardware for storing, sharing and downloading digital content.

Many PCs in the category feature Microsoft’s Windows Media Centre Edition operating system, which is based on Windows XP, but Intel’s Viiv platform threatens Microsoft’s dominance of the segment.

Hartin blamed the lack of compliant hardware and services to support the Viiv launch for a virtual standstill in retail buying of media centre PCs, as many buyers refused to buy non-Viiv compliant hardware.

“People were saying we don’t want to buy anything unless it is Viiv compliant, but at the time there just wasn’t any hardware available,” he said.

Hartin called Viiv ‘vapour ware’ and said the functionality demonstrated at Intel’s launch has only just become available in the last few weeks.

Altech Computers estimates media centre PCs account for around five per cent of sales in the PC category, but this will increase in the lead up to Christmas and account for 10 to 12 per cent by the end of the year.

“If you look at the life cycle of Windows Media Centre, it was originally the lunatic fringe who took it up, but as time went on it was power users and enthusiasts. Now we are getting to the point where consumers are starting to take it on because they are getting the message about what the benefits are,” said Hartin.

Windows Vista is also expected to give the media centre PC segment a boost, with two of the seven Vista SKUs featuring media centre functionality.

Microsoft told conference delegates that Vista will lead to an overall pickup in PC sales.

“We are in the process of working with our launch partners to plan the approach,” said Microsoft director of Windows, Jeff Putt.

“We are launching Vista into a different world to when we launched Windows 95; people are more tech savvy and a bit more cynical about computers, so we are going to have to take a different approach towards the launch. Details will be made available soon.”

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