It starts with audio," says Dell's chief executive, Michael S. Dell. But, he says, "video is certainly coming." He points to Dell Computer's recent purchase of a minority stake in Digital Entertainment Network Inc., Los Angeles, which runs short soap-opera-like programs on the DEN.net Web site. "It's an only-on-the-Internet television network," Mr. Dell says. "We think there's a big change going on here."
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PC Makers Seek to Topple
TV's Entertainment Throne
By GARY MCWILLIAMS
Staff Reporter of THE WALL STREET JOURNAL
Home-computer sales are staging an unexpected surge, and one big reason is a major shift in how consumers are using them: as stereos, recording studios, high-tech photo albums and other kinds of entertainment centers.
PC makers, who have tried vainly for years to promote their machines as alternatives to television and game players, are now racing to feed the growing new market for entertainment applications.
Dell Computer Corp., Gateway Inc. and Packard Bell NEC Inc. are all tapping into growing interest in digital music with systems designed as recording studios. Packard Bell NEC's offering comes with software for downloading and organizing MP3 music files from the Web, and a "rewritable" compact-disk drive will convert songs to CDs that can be played in the car or stereo. Dell's ads boast that its latest home model, featuring software that organizes music into a jukebox, is the "PC that will make my stereo fear for its life."
Next month, Compaq Computer Corp.'s fall line will showcase both new PCs and Internet services centered on leisure activities. One package includes a tie-in with eBay Inc. that will include a PC, digital camera and links to create Internet auction pages.
"People used to say, 'It's for the kids' education,' " says Michael J. Larson, Compaq senior vice president for consumer products. Now, he says, "it's not so bad anymore to say you're doing a lot of things that are a little more entertainment-focused."
U.S. unit sales of home PCs are expected to surge 37% this year to 15.8 million machines, says market researcher International Data Corp. The projections exceed even the peak sales that followed the release of Microsoft's Windows 95 software. IDC attributes the growth to falling prices, and rebates tied to Internet service contracts, as well as the boom in entertainment applications.
The latest IDC numbers "show a totally unexpected surge in U.S. home PC buyers," says analyst Roger Kay.
Behind the trend are PC buyers like Bill Conroy, a financial analyst. He has a new Dell model that doubles as the entertainment system in his Houston home. With five speakers, he says, "this is the kind of sound system that when we have people over, I'm not embarrassed to use it for music."
Dianne Scudder of Lakeside, Calif., who has a home-based business geared to cat owners, recently cajoled her husband into buying a souped-up Gateway PC because their old machine wasn't powerful enough to run jukebox software.
"I couldn't tell him I needed it to play music," Ms. Scudder says. "I complained about it so much, he gave in," she says with a laugh.
There was a similar plea at the Clough house in Haverhill, Mass. Justine Clough, a seventh-grader, says a cousin introduced her to digital music downloads available on America Online Inc. "I got into it this summer," says the 12-year-old. "I just like to listen to the music." Now, she has persuaded her parents to trade in their aging PC for a new Gateway model.
Mal Ransom, Packard Bell NEC's senior vice president of marketing, says that all the computer companies now realize low prices have made PCs affordable to buyers who are uninterested in technology.
"Most advertising today is speeds, feeds and price," Mr. Ransom says. But Packard Bell NEC's new marketing campaign will drop that message for "what you can do with music or photography," he says.
The television set still reigns supreme as the one home-entertainment device that outsells the PC by a wide margin. But PC manufacturers have high hopes of toppling TV's throne.
"It starts with audio," says Dell's chief executive, Michael S. Dell. But, he says, "video is certainly coming." He points to Dell Computer's recent purchase of a minority stake in Digital Entertainment Network Inc., Los Angeles, which runs short soap-opera-like programs on the DEN.net Web site. "It's an only-on-the-Internet television network," Mr. Dell says. "We think there's a big change going on here." |
