The urge to converge
Tech companies are cutting through the clutter to get to the consumer.
By Amanda Cantrell, CNNMoney.com staff writer

LAS VEGAS (CNNMoney.com) - Convergence, that oft-repeated dot com buzzword, could actually be coming to life, if Silicon Valley's tech titans have their way.

At the annual Consumer Electronics Show here, PC and gadget makers, software companies, and chip makers all hyped the theme of "convergence" in other words, different forms of digital entertainment coming together on a single computer in the home and accessible through various devices -- digital content that lives on a PC but is watched and listened to on high-definition TVs and sound systems.

Moreover, manufacturers preached ease of use as a critical aspect of convergence, arguing that consumers won't go for the digital living room concept if it's too complicated to use. Simplicity, from making all that content accessible with one remote control to reducing the number of wires, was a major theme of keynote speakers from Intel's Paul Otellini to Google's Larry Page.

These CEOs say a key ingredient of convergence is content, with various companies announcing content deals with TV channels and other media companies. Google (Research) struck deals with CBS (Research) and the NBA for its Google Video service; Microsoft unveiled Urge, a partnership with MTV for an online music store; and Intel announced several deals as part of the launch of its "Viiv" brand of entertainment PCs, designed to serve as the hub of digital movies, music and other forms of entertainment in the home.

Evolution, not revolution

This year's CES seemed to display "evolution, not revolution," according to Yankee Group analyst Michael Goodman, meaning that he saw few truly cutting-edge new technologies, but rather improvements on technologies that have debuted at past CES shows, such as flat-screen TVs and entertainment PCs.

Intel's hype-heavy Viiv launch included a star-studded keynote speech from Paul Otellini, who recruited actors Tom Hanks, Morgan Freeman and Danny DeVito to help hawk a new service that would allow consumers to download and watch movies at home that are still showing in theaters. Otelinni also announced deals with content providers including DirectTV and Turner Broadcasting (like CNN/Money, a unit of Time Warner (Research)), among others.

But despite the blitz, Intel acknowledged it may take awhile for consumers to get comfortable with the idea of a PC that lives in the living room and sits on an entertainment console next to the TV.

Bill Leszinske, general manager for the networked media platforms group at Intel, said the company estimates that initially, only 10 to 15 percent of Viiv-based PCs sold will actually be incorporated in consumers' living rooms, with the vast majority acting as a typical (albeit much smaller) desktop PC, since Viiv-based computers are designed to be small enough to act as set-top boxes.

Microsoft also hyped the "digital living room" concept, showing a new version of its Media Center software that will work on Viiv-based PCs.

Yankee Group's Goodman said he feels these PCs probably won't gain traction until the 2006 holiday sales season, at the earliest. This is in part because Windows won't debut its new operating system, Vista, until later in the year, meaning that customers who buy a Viiv-based PC now will have to upgrade their operating system later in the year if they want Vista.

Faster, better processors

Intel also debuted its new dual-core processor platform, Core, and unveiled the Core Duo line of dual core chips, which put two processors on one chip. Intel's Karen Hughes, a manager in Intel's mobile platforms marketing group and a former Intel engineer, said dual core chips improve both power and efficiency -- something of a breakthrough in computing, since better performance usually went in tandem with higher energy consumption.

Several manufacturers, including Dell (Research), unveiled new computers using Core chips. Dell chairman and founder Michael Dell also unveiled a "concept" laptop, or a model that the company is working on bringing to market but that is not ready yet, featuring a 20-inch display and built-in handles for portability. The high-concept computer drew oohs and ahhs from techies in the audience.

Ease of use paramount

In separate keynote speeches, the CEOs of Yahoo! (Research) and rival Google each unveiled new programs designed to make using their software easier for consumers.

Yahoo! CEO Terry Semel unveiled "Yahoo Go!", a new service that lets users access Yahoo! Features such as search, maps, e-mail and messenger through a single interface that can be accessed through PCs and TV screens as well as mobile devices like laptops and cell phones.

The service lets customers keep their files and settings the same across various devices; if a customer makes a change to his or her profile settings while using a PC, the changes are reflected on the user's cell phone as well, for example.

Google co-founder Larry Page said ease of use is the driving motivation behind Google's products. He introduced a new feature, Google Pack that allows users to simultaneously download several programs for using the Internet, such as the Mozilla Firefox browser, Adobe Reader 7, and Google software such as Google Earth. Page also unveiled the Google Video Store and the Google Video Player, new software for viewing video purchased on Google's video store.

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