“When Microsoft invested a cool $1 billion in Comcast more than eight years ago, Chairman Bill Gates talked up a grand vision for a world of connected PCs and TVs. Since then, his company’s tentacles have spread in all directions in hot pursuit, acquiring WebTV, launching the Xbox video-game console and Media Center PC, and creating a new platform called Microsoft TV IPTV, or Internet Protocol TV,” Ronna Abramson reports for TheStreet.com. “And yet, the digital living room still remains a thing of the future — an affliction of sorts for Microsoft, given the vast sums it has spent trying to realize that vision. Though Microsoft has misstepped, other factors have postponed the arrival of the connected home.”
“‘There’s an opportunity bigger than Windows … if they [Microsoft] can make it work,’ says Steve Perlman, who heads tech and media incubator Rearden. That’s because the universe of television sets — an estimated 250 million in the U.S. alone — is far greater than that of PCs, where Windows dominates, says Perlman,” Abramson reports. “Cable companies aren’t flocking to Microsoft’s IPTV service because they’re afraid of Microsoft strong-arming the user experience as it’s done on the PC, and they want as much as of the tens of billions of dollars they spent on their current networks as possible. AT&T and Verizon, however, are jumping on the bandwagon, looking for new revenue to supplant their maturing wireline businesses. ‘The DSL guys have all the motivation in the world to innovate because telephony is being absolutely destroyed by Internet phones and cell phones,’ Perlman says. ‘It’s do-or-die for them at this point.'”
“‘If there’s one guy who is going to try to put everything together … Steve and his team have one of the unique opportunities,’ Tim Bajarin, president of tech consultancy Creative Strategies, said of Apple CEO Steve Jobs at a recent digital living room conference. ‘Look at the Front Row interface they created — you can see digital living room written all over it,’ he added, referring to Apple’s interface for viewing digital media. And then, of course, there’s Apple’s huge success with music and recent deals to sell video content from NBC Universal at its iTunes music store,” Abramson reports.
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