Blackfriars' Marketing

Wednesday, August 24, 2005

Do consumers really want Intel Viiv?

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Don MacDonald, SVP of Intel's Digital Home initiative, today announced Intel Viiv, a new ingredient brand for media PCs due to arrive in 2006. Like the Centrino technology brand, Intel intends Viiv to represent an entire suite of Intel components, all of which must be present to create what it considers to be the best home entertainment experience. The concept is that Intel Viiv platforms will be available in a variety of form factors including small compact systems designed to fit in with ordinary consumer electronics products.

Dr. Genevieve Bell, an Intel anthropologist that studies consumer behavior, set the tone for the announcement with the comment, "LIfe doesn't go according to plan.", implying that consumers, not Intel, would decide whether and how consumer electronics products would fit into their lives. But that advice was promptly ignored as Mr. McDonald proceeded to show dual-core media center PCs in small form factors, claiming that they would give consumers access to their content anytime anywhere. But with special over-the-air encryption, Microsoft digital rights management, and broadcasters reluctance to provide media in digital form to consumers, we suspect this claim will take a long time to prove true.

Why the skepticism? Because 90% of the value that is being added through the PC doesn't require a general purpose PC, nor does it demand centralization of all the content. Worse, PCs don't meet most consumer's expectations for electronics devices, such as maintenance-free use, instant on and off, and plug and play simplicity. The Viiv brand is defined to include Windows Media Center OS. That's a far cry from the simplicity and consumer acceptance of a DVD player or an iPod, and I expect consumer adoption to reflect that.

Bottom line: it is going to take more than "its a PC" for Intel to crack the digital home. As Dr. Bell said, consumers don't want to build the digital home. They just want their home digital. And despite PC familiarity, it's going to take more than sleek form factors for conventional PCs to get them to want one in their entertainment center.