Computer Makers Focus on Set-top Boxes to Merge TV, PC
As a result, many computer makers have backed off from including TV-reception capabilities in their new products. Among the big players this year, only Gateway will ship hardware with circuitry to support Windows 98 TV-tuner functions. Sean Kaldor, an International Data Corporation analyst, says most people don't need the extra complication. Furthermore, the cost is too high. Gateway's high-end PC/TV lists for over $3000 at a time when 40% of new computers sold are priced under $1000.
Even Microsoft, the owner of WebTV---the $300 set-top box that allows TV viewers to surf the Internet and send and receive e-mail---predicts that PCs with TV-tuner cards won't gain popularity until next year, if at all. However, the concept of a set-top box allows computer makers to hedge their bets.
Compaq has decided to follow Microsoft's lead by developing two new set-top boxes of its own. One of these boxes, which runs Windows 98, is now in production and should be market-ready by June. The other box, running Windows CE, is being readied for a November release to coincide with the debut of digital television.
Compaq's two previous excursions into the convergence market both failed. A TV-tuner card was offered as a system upgrade, but it went nowhere. A year ago, the company attempted a high-end PC/TV in collaboration with Thomson---the PC Theatre---which retailed at $5000. In January, it was deleted from Compaq's line after winning very few sales.
Is convergence a case of much ado about nothing? Do home-theater fans care as little about the Internet as computer folks seem to care about television? Is a bridge between the two really necessary? Or are convergence products a different category altogether for the vast bulk of the population who are neither computer-savvy nor really plugged into high-end home entertainment? The majority of the buying public are curious but reluctant to commit big bucks to potentially dead-end technology. Three hundred dollars might be as much as most are willing to gamble.