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Consumer Media Center PCs Growth Spurt

Current Analysis reports that in 2005, Media Center desktops reached a long-sought breakthrough in consumer adoption, as they increased from an 8 percent share of U.S. retail desktop sales in January 2005 to 48 percent in December 2005.

This was based in large part on the lower price points obtained by omitting the TV tuner hardware component. However, recent Current Analysis data show that TV tuners, which allow Media Center users to receive and record television signals, are making a comeback.

Desktop computers equipped with TV tuners bottomed out in October 2005 with an 8.7 percent unit share but increased each month thereafter, culminating in a 12.8 percent unit share for February 2006.

The television arena is pivotal turf in the war for the Digital Home because it offers the most opportunity for lucrative infrastructure and broadcast content. Viewed in this light, music is in second place in terms of its ability to generate revenue, with photos and radio in distant third and fourth places.

Manufacturers that want the desktop computer to be the center of the Digital Home will want consumers to use TV tuner-clad PCs instead of TiVos, dedicated DVRs or intelligent set-top boxes. The installed base of these respective devices is important: Consumers who already have a TV tuner-clad PC may stick with it even if it doesn�t offer the same ease of use or narrowly tailored functionality of a TiVo.

In turn, video content providers will have a straightforward path to consumers via the PC, and computer hardware and software vendors will get to manage the tollbooth -- not the broadband service provider.

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