Connected Home EXPRESS, January 8, 2003

Connected Home EXPRESS—Brought to you by Connected Home Magazine Online, the unique resource to help you tackle home networking, home automation, and much more.
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HomeTech Solutions

SPONSOR: HOMETECH SOLUTIONS

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January 8, 2003—In this issue:

1. GETTING CONNECTED

2. NEWS AND VIEWS

3. ANNOUNCEMENTS

4. QUICK POLL

5. RESOURCES

6. NEW AND IMPROVED

7. CONTACT US
See this section for a list of ways to contact us.

1. GETTING CONNECTED
By Paul Thurrott, News Editor, [email protected]

Greetings,

This week, two key industry trade shows will help determine the consumer technologies we can expect to see vendors roll out in 2003. Most of the computer industry will set its sights on the 2003 International Consumer Electronics Show (CES), held as usual at the palatial Las Vegas Convention Center. This year, CES has broken floor space, exhibitor, and attendee records, bucking industry trends at other large shows such as COMDEX. Also bucking trends is Macworld Conference & Expo, hosted once again at San Francisco's Moscone Center near Apple Computer's home turf. Macworld boasts a respectable 88,000 attendees this year, although exhibitor numbers have fallen dramatically for the past few years. But despite Apple's relatively small market share—about 2.5 percent worldwide at last count—the Macintosh maker boasts an unusually high amount of "mind share," with Mac-friendly journalists and publications continually boosting the company's public image. Say what you will about Apple; the company's style and sheer panache has kept it viable through some tough years.

CES—What's Ahead for the PC?
As with last year's show, CES will continue its focus on digital-media and home-networking technologies, with an emphasis on gadgets that enhance, rather than replace, the PC. Although 10Mbps 802.11b wireless technologies will probably continue to dominate the market in 2003, many vendors are starting to move into faster 54Mbps speeds with technologies such as 802.11a and 802.11g. And vendors will replace last year's crop of unwieldy and expensive entertainment set-top boxes with more economic digital-audio and -video receivers that interact with music and movie content on your PC through your home network. These devices let you consume digital media in the room in which you probably keep your best stereo equipment—without usurping the PC's key strengths for acquiring that content.

On the digital-media front, working with digital audio, photos, and videos has never been easier. Thanks to the success of Windows XP and its bundled digital-media experiences and the low cost of digital cameras and digital- video cameras, tens of millions of consumers are now working with these exciting technologies for the first time. Predictably, Microsoft isn't sitting still with XP. The company is shipping several free and low-cost XP upgrades, including Windows Media Player 9 (WMP) 9 Series, which supports the company's new Windows Media Audio (WMA) 9 and Windows Media Video (WMV) 9 formats and provides new features such as Auto Playlists and a bundled Advanced Tag Editor; Windows Movie Maker 2, a friendly yet powerful movie editor with dozens of free titles, transitions, and video effects and an innovative Auto Movie feature for automatically editing your home movies; and Plus! Digital Media Edition, a $20 XP add-on that Microsoft is selling as an online download. Plus! Digital Media Edition includes several cool applications, such as Plus! Photo Story—for creating zooming and panning slide show movies from your photo collection—and Plus! Analog Converter—for converting cassette, LP, and other analog audio content to the PC. My full review of Plus! Digital Media Edition is available now on the SuperSite for Windows.

Microsoft has also made a strong case for XP Media Center Edition (XP MCE), which is now bundled on a variety of machines from several PC makers. At CES, Microsoft will announce more hardware partners and two partners—Alienware and Toshiba—that will soon offer Microsoft's innovative digital-media-oriented XP version on high-end desktop replacement laptops aimed at enthusiasts and power users. Let's hope the next step is a standalone XP MCE version that any XP user can purchase. Regardless, digital video recording (DVR) is here to stay and is a natural for PC and consumer electronics integration. Microsoft will also announce several initiatives surrounding its Windows Powered Smart Displays, including more hardware partners and interestingly alternative uses for the devices, such as controlling home-automation equipment.

Other trends that will likely go mainstream in 2003 include DVD moviemaking and data backup and High-Performance Media Access Technology (HighMAT) CD-content creation. And new hard disk-based portable video devices will probably do for digital video what SONICblue's Rio and Apple's iPod did for MP3 audio.

Macworld—What's Ahead for the Mac?
The Mac side of the picture is a little more uncertain. Historically, Apple gives few preshow clues about the products and services CEO Steve Jobs intends to discuss during his highly anticipated keynote address, and this year is no different. However, the company recently released an update to iCal (version 1.0.2) and the final version of iSync, both of which are free. I'll review both products soon. (The short version: iCal 1.0.1 was so buggy that Apple quickly released version 1.0.2, but iSync is a master work that offers seamless integration among your Mac's address book, iCal calendars, .Mac account, Palm OS-based PDA, iPod, and various Bluetooth-based cell phones.)

As I write this commentary, a lot of rumors are floating around about Jobs's keynote address, but little concrete information is available. For example, Apple might begin to charge for certain "iApp" (e.g., iMovie, iDVD, iPhoto) upgrades in 2003, and the company is expected to offer a second digital appliance to accompany its successful iPod.

But a larger concern for Apple and its fans is the success of Apple's "Switch" campaign and retail stores, both of which Apple designed to increase consumer awareness of its brand and product lines, and, the company hoped, to snag some market share from the Windows juggernaut. Although Jobs's spin will be interesting, some facts remain: As 2002 ended, Apple had sold fewer computers than the previous year and dramatically fewer than 2 years ago. The company's most recent quarter resulted in a financial loss, and Apple's market share has fallen in the 6 months since the "Switch" campaign started. None of these results mean that Apple is doomed—the company has more than $4 billion in cash and fiercely loyal users—but its recent high-profile initiatives and new products such as the flat-panel iMac appear to have had little effect on the bottom line. In 2003, Apple will have to sell more machines and appeal to a wider range of users if the company hopes to remain viable.

But Wait—There's More
By the time you read this newsletter, Jobs will have given his Macworld keynote address and Microsoft Chairman and Chief Software Architect Bill Gates will have kicked off CES with his own speech, so we'll have a clearer picture of where Apple and Microsoft are taking consumers in 2003. There's never been a better time to pursue the digital lifestyle in your connected home. And we're looking forward to another year of providing timely news, advice, and information while answering your questions about these often-confusing technologies. If you want me to tackle particular topics in Connected Home EXPRESS this year, drop me a note at [email protected]. Happy New Year!

2. NEWS AND VIEWS
(An irreverent look at some of the week's Connected Home news, contributed by Paul Thurrott and Keith Furman)

With this week's introduction of Plus! Digital Media Edition for Windows XP, Microsoft will sell downloadable retail software online for the first time. The new software includes standalone applications and various add-ons for Microsoft products such as Windows Media Player (WMP) 9 Series and Windows Movie Maker 2. The product, which costs $19.95, will be available online as a download and in shrink-wrapped boxes in retail stores. Plus! Digital Media Edition will use a new product-activation technology that ties the software to an individual machine but makes it easy for users to install it on other machines by purchasing new activation keys online.

Details of updated and next-generation video game consoles are starting to emerge. A new Envisioneering report says that Microsoft plans to release the next version of the Xbox (rumored to be called Xbox Next, although we recommend the name Xbox 2: The Quickening) in 2005, shortly before Sony releases the PlayStation 3. According to the report, both consoles will include digital video recording (DVR) technology and graphics so real that you'll have to clean the drool off your shirt when you use them. Before Microsoft and Sony release the Xbox Next and PlayStation 3, the companies will probably redesign their current consoles later this year to take advantage of updated technology that enables smaller versions. The redesigned units are also expected to feature lower prices—probably $150 instead of the current $200.

On January 1, computer geeks around the world celebrated what they call "the real birthday of the Internet," marking 20 years of online, interconnected existence. On January 1, 1983, government scientists turned off older networking technologies at ARPANET, the Internet's progenitor, and turned on TCP/IP, the technology the Internet uses today. The connected computer network has existed since the early 1960s, but the introduction of TCP/IP brought about the Internet we know and love today.

Late last month, the US Supreme Court got involved in an ongoing battle between the entertainment industry and a Web master who in 1999 posted DVD-decryption information on his Web site. US Supreme Court Justice Sandra Day O'Connor issued a temporary stay that prohibited Matthew Pavlovich from posting information about how to crack DVD encryption. The entertainment industry has been battling Pavlovich in court, but the California Supreme Court handed the industry a setback when it ruled the industry couldn't sue Pavlovich in California because he isn't a resident of that state and his Web site isn't located in California. Justice O'Connor's ruling appeared to give the entertainment industry a victory, but that victory was short-lived: A little more than a week later, she threw out her emergency stay. The industry is now debating whether to appeal the case. Unfortunately for the entertainment industry, the case doesn't really matter. Pavlovich's information is already widely distributed on the Internet and even appears on T-shirts.

3. ANNOUNCEMENTS
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4. QUICK POLL

The voting has closed in Connected Home Online's nonscientific Quick Poll for the question, "Have you switched from Mac to Windows or Windows to Mac?" Here are the results from the 219 votes:

-  9% I've switched from Mac to Windows-  4% I've switched from Windows to Mac- 17% I use both Mac and Windows- 68% I've used only Windows; I've never switched-  3% I've used only a Mac; I've never switched

(Deviations from 100 percent are due to rounding error.)

The next Quick Poll question is, "Which Instant Messaging (IM) product do you use?" Go to the Connected Home Online home page and submit your vote for a) AOL Instant Messenger (AIM), b) MSN Messenger, c) ICQ, d) Yahoo! Messenger, or e) I don't use IM.

5. RESOURCES

(contributed by Paul Thurrott, [email protected])

This week, Microsoft released new versions of Windows Media Player (WMP) and Windows Movie Maker, and all Windows XP users should evaluate both products if they're interested in digital-media activities. WMP 9 adds support for the Windows Media 9 Series formats, video-smoothing capabilities, a new mini-player mode, new skins, support for instant-on and always-on streaming, and other features that make this release a must-have upgrade from Media Player for Windows XP. Windows Movie Maker 2, which we reviewed late last year, is another must-have upgrade. The software features powerful editing, titling, and special-effects capabilities, plus an innovative Auto Movie feature that makes this product the best consumer-oriented video-editing application on any platform.

Windows Media 9 Series
Windows Movie Maker 2

Got a question or tip? Email [email protected]. Please include your full name and email address so that we can contact you.

6. NEW AND IMPROVED
(contributed by Jason Bovberg, [email protected])

Dolby Laboratories announced Dolby Virtual Speaker technology for enhanced PC entertainment. Dolby Virtual Speaker technology simulates the dynamics and surround-sound effects of a precisely arranged 5.1-channel speaker system on a two-speaker PC. The launch of Dolby Virtual Speaker is part of the company's new "Dolby in PC" initiative, which is aimed at the PC's evolution as a home-entertainment gateway. For more information, contact Dolby Laboratories on the Web.

DragonWorks Interactive released Elemental, a puzzle game in which you save the planet from the clutches of the evil Dr. Mechanico and his army of robots by puzzling your way across rock walls, raging rivers, forest fires, and more. You use the elemental powers of nature—earth, air, fire, and water—to overcome obstacles and solve puzzles. The game is based on thoughtful puzzles and logic rather than action and violence. Elemental offers more than 30 levels of play and runs on Windows XP, Windows 2000, and Windows 9x. The game costs $24.95. For more information, contact DragonWorks Interactive at 304-488-3129 or on the Web.

7. CONTACT US
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