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Xbox May Show Its Moxi

16 Jan, 2002 By: Hive News

Microsoft is keeping mum on plans to transform its new Xbox game console into a general home device that handles everything from DVD to e-mail to video recording, despite recent reports from analysts.

Prudential Securities analyst Hans Mosesmann, who covers graphics chip maker Nvidia, released a report Tuesday stating that HomeStation, a multifunction consumer appliance that has been the subject of speculation for several months, is real and could dramatically change the PC market. Mosesmann argued that Nvidia, which provides chips for the Xbox, could be one of the companies to benefit from the Homestation.

Richard Doherty, president of research firm The Envisioneering Group, told Cnet News that, based on briefings with Microsoft and its suppliers, he believes a version of the HomeStation will be on the market by this fall.

Mosesmann's report said the HomeStation will be based on the Xbox design, which is similar to that of a PC and has standard PC components and features such as USB ports. Besides playing Xbox games, the HomeStation will act as a digital video recorder, similar to devices from TiVo and Sonicblue's ReplayTV, and will perform Internet functions such as e-mail and Web surfing.

The device will also play DVD movies and digital music tracks. The HomeStation would hook into Microsoft's .Net online strategy by serving as a conduit for services such as streaming media and online shopping, he said, adding the current Xbox could handle most of those functions with minimal retrofitting.

"It's basically a PC; it has DVD capability," he said. "You would just add some connectivity there, a bigger hard drive, some video recording software, some Bluetooth -- and voila, you've got something that can be marketed as something else."

Based on unofficial discussions with Microsoft suppliers, Mosesmann said he expects Microsoft to announce the HomeStation late this year and have it on the market next year.

Doherty foresees a more accelerated time schedule, with some version of the HomeStation on the market this fall, thanks to competition from start-up Moxi Digital, which last week announced a similar home entertainment hub (see Upstream, VSM, Jan. 20-26). That console, from WebTV founder Steve Perlman, is already the subject of a deal with Echostar. Perlman sold WebTV to Microsoft for a reported $500 million.

The HomeStation would fit into plans Microsoft announced last week that would turn PCs into digital entertainment jukeboxes for the home. Microsoft's Freestyle will expand the Windows XP operating system with functions for recording video, playing DVDs and other entertainment tasks.

Mosesmann said HomeStation could have a major effect on the PC market by drawing a sharp distinction between home PCs and business PCs.

"I think the consumer PC market becomes pretty tough if something like the HomeStation becomes real," he said. "Then it doesn't matter where you're located in the home. That's been the problem with getting the consumer PC to do more: It sits in your den, and nobody wants to watch movies in their den."

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