Microsoft's Portable Ploy

@ 2004/07/11
By Alyce Lomax (TMF Lomax)

Portable media is about to go to the next level, with Amazon.com (Nasdaq: AMZN) today announcing that it's taking pre-orders for Microsoft's (Nasdaq: MSFT) Portable Media Centers. These gadgets, which will begin to be available as soon as August, allow users to have music, movies, digital photos, and more rendered portable and on the move.

Did Apple (Nasdaq: AAPL) miss a key opportunity by limiting its iPod to tunes?

Anyone who's been following the digital music player scene knows that one of the major speculations has been whether Apple would expand its iPod's functionality to download and show movies. Steve Jobs has been quoted as nixing the idea, theorizing that people don't want to watch movies on tiny screens.

To my way of thinking, Jobs may be onto something. Digital movie downloads to personal computers haven't even yet hit the mainstream, though some companies, such as Netflix (Nasdaq: NFLX) and RealNetworks (Nasdaq: RNWK) are gearing up to try. (For more on the state of movie downloads, check out Seth Jayson's Take on digital movie piracy today.) Motley Fool Stock Advisor pick TiVo (Nasdaq: TIVO) may very well have the best idea, with its Home Center appealing to mainstream tastes. That is, to allow its users to easily bridge PC to TiVo to the family room TV. That last concept may be the real near-term future of "media centers."

Music, of course, lends itself well to the portable concept, as it's always been a media that went well with multitasking, such as jogging, working, or reading. Portable movies or television seem a harder sell, since that feature doesn't accommodate many activities that require portability, with the exception of perhaps long subway train commutes or airplane flights.

At any rate, Microsoft's Portable Media Centers, which will be manufactured by Creative Labs, iRiver, and Samsung, will have what could be called a steep price tag of $500 (though, as has often been pointed out, Apple's iPod sported what many mocked as a too-hefty price, and it still became a sensation).

These are key times for digital media, and Apple's got more than its fair share of competition, judging by recent product launches by hungry rivals. In the case of all-inclusive portable digital media, though, Microsoft may be jumping ahead of the times too soon.

Alyce Lomax does not own shares of any companies mentioned.

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