HP Exits Media Center Business: Touchsmart Lives On

By Rob Enderle March 31, 2007

It has to be tough when the leader in a segment you are trying to get off the ground exits it saying they simply don’t have enough resources to get it to work. For HP this has been a long road because they have been working on products in this class since before there was a Media Center and they continue with their somewhat related Touchsmart and MediaSmart TVs with built in media capability. Gateway, who had several of the more innovative MCE based products, also exited this segment though they did it some time ago.
So what happened to the Media Center and why didn’t it work out better?
Hardware Fell Short
We’ll get to software in a moment but the real promise of the Media Center was simplification. The idea that in one product you could have a super receiver with radio and TV that could time shift online downloadable or streamed audio and video content, and even act as a DVD player.
The idea of simply hooking up your speakers and having this all-in-one machine was really compelling; unfortunately retail stores didn’t want you to be able to do this.
Retail stores make a lot out of selling receivers and they said they didn’t want Media Center PCs with built in amplifiers. This meant you had to plug them into your receiver which not only made it harder to hook up, it made it a lot harder to use. Now, instead of 2 remotes (one for the TV and one for the Media Center) you had three and a redundant radio. The complexity was almost scary and most guys couldn’t figure it out and women, who often think tech is a waste of money anyway, were less than pleased.
Currently only Alienware, now owned by Dell, have been previewing an MCE with a built in Class A amplifier and they are able to bring this to market because they sell direct and not through retail.
Because this was basically a PC, you had significant heat and noise issues to deal with. Initial systems were both very hot and very noisy. HPs were one of the exceptions with regard to noise, but they did throw off a lot of heat. In addition you had to deal with keyboard and mouse issues. A few of these machines shipped with wireless keyboards and mice initially, and even when wireless did show up, the mouse experience was less than ideal unless you were using a keyboard specifically designed for the Media Center (HP had one of the better ones and Microsoft actually sold one of the best, in fact their current Bluetooth MCE keyboard is one of the best keyboards on the market period but it just came out recently and isn’t cheap.)
Finally, these things were expensive. Average costs were over $1,000 in a market where you can get a lot of high-end CE hardware for that price providing a lot of competition for the money with traditional gear.
Software Wasn’t Complete and Was Too Complex
While the Vista version of Media Center is vastly improved, it still lacks the kind of ease of use you’ll find in a typical set-top box or competitive offering like Apple TV (which also has issues, just different issues). While the MCE interface itself was very easy, the fact that it sat on top of a full OS created a lot of additional complexity which made the solution much more difficult to use than it should have been. This was one of the reasons HP explored doing a Linux based Media Center but they couldn’t get the customer experience to where they needed it nor could they get the price of the solution down to where it needed to be so they abandoned that effort.
What the MCE should have been is a strong interface on top of embedded Windows so that it was more appliance-like and vastly easier to use. This comes closer to what the Apple TV and, frankly, Xbox 360 provide (which is part of why the OEMs that asked Microsoft to do this are a little upset with Microsoft right now). You’ll see products from Cisco in the second half that are much closer to this ideal and there are a number of additional companies going down this path, some are actually using embedded Windows but many are using non-Microsoft platforms to get this done because Microsoft was seen as unresponsive to the request for a living room appliance.
The product was also partially crippled intentionally. First on the cable side, while it could easily play High Definition video, you couldn’t get it into the box unless you got it over-the-air. Cable card has only just shown up and if you do record programming using Cable card you probably can’t move that programming to another TV, hand held media player, or laptop and portability was one of the major advantages for an MCE.
Crippled From the Start
What happened with this product (and it is what happens with many of Microsoft’s offerings) is no one sits down and lays out the product in terms of what it must have. The product is defined by what Microsoft wants to do. Had this simple comparison been made, Gateway (who initially had some of the best MCE products on the market), Sony (who had one of the most complete offerings) and HP probably could have saved a lot of money and concluded that what they were building simply wouldn’t be good enough and instead focused their efforts elsewhere.
By the way, this isn’t just a Microsoft problem. Had these vendors said "No" and been clear on what they wanted, there is every likelihood that Microsoft would have eventually given it to them. But they took what they were given and by doing so contributed to the relatively poor showing for this product. If the OEM’s can’t define a product and require their vendors, including Microsoft, to give them what they need for it to be successful they not only share the blame they get the lion’s share of it.
One of the most powerful hardware executives in the market whose company sells huge numbers of PCs that run Media Center doesn’t run one at home. He run’s a Kaleidescape and that is what a Media Center should have, could have, and must be to be successful, but at a much lower price. Something to think about as we say goodbye to HPs MCE.

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