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Thursday, January 05, 2006

The Microsoft Engine Roars In CES Terrain

Bill Gates speech in CES - tiltled Vision for the Digital Lifestyle exemplifies a far reaching vision with significant impact in the CES landscape. Gates said that the incredible momentum around all these new products and services shows that the digital lifestyle has truly gone mainstream this year and that it’s time to bring together the devices, software and services in people’s lives and take all these experiences to the next level. Om Malik writing on the MTV’s Microsoft-powered Urge says that the online music service will be selling to the ultimate demographic: the teen set. MTV’s unlimited airtime resources will be hard to match for the likes of Napsters, Yahoos and Reals of the world. Because in order to match MTV’s sales channel, they will have to spend spend spend. (Just like in the PC domain, Microsoft wants to be the “engine”, get a piece of the action, while others simply butt heads. )We already covered the perspective at the end of last year CES stating the likely ,impact of microsft's initiatives over competitors, though they may not realize it yet. Last year's decisive move was their MSN Video announcement which included deals with MTV as well as TiVo to make sure that TiVo To Go recordings play on Microsoft Mobile devices.Microsoft's DRM strategy and Windows Media WMA codec are going to allow them to have a massive advantage in the consumer electronics market, which includes everything from MP3 players, to mobile phones to your set-top box, to a host of other converged devices.Very soon anything you're able to record on your TiVo will be playable on your Windows Mobile device, the new MSN Video Downloads service (among others) will allow you to see television and movies, and the variety of integrated music stores will allow you to buy and play music. There's no competitor to this breadth of mobile media offerings right now or possible in the near future. It was clearly expected months back that though Microsoft may not lead in music downloads, though the combination of all the different WMA music stores, it might come close to Apple's iTunes. We also cautioned that the consumer electronics companies had better get a move on, because Microsoft is gaining allies in CE which are prepared to put Windows Media DRM on devices such as DVD players, DVRs and Home media servers, and these, mostly small Chinese players, will begin to eat into Sony, Philips, Matsushita’s and Samsung’s markets if they cannot offer in return a standardized DRM approach, and so on. Clearly the Microsoft Juggernaut is getting warmed up to move ahead.

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