digg_url = 'http://www.ehomeupgrade.com/entry/4003/microsoft_soon_to'; digg_title = 'Microsoft: Soon to Be Your TV Manufacturer?';
This tidbit went largely unnoticed yesterday, which I found strange. I saw the headline in today's remainders of press-wire stuff and immediately it made me wonder what Microsoft could be up to. The article itself talks about the two companies working together to develop connected entertainment applications, and it seemed to hint that these may be focused on the Chinese market. Either way, I found the investment in a hardware company interesting and if I may, I'll take a few stabs and potential larger meaning (if there is indeed one)-Microsoft announced their Media Center Extenders partner program over a year ago at WinHEC 2006, and since then there have been no 3rd party Media Center Extenders and we're six months into Vista. Now, I have been assured by the eHome group that partners are coming soon (in time for Christmas), but this may be a sign the company is either looking to build their own or are looking to somehow get closer to the hardware side in terms of product development for their MCX program
-They may think the Chinese market, in particular, may be greenfield for development of IP connected video products and this may be their entree into the market. They do have some IPTV partners in trials in China Netcom, but this is more of a play towards the end-user and potentially for public Internet video.
-They could be so enamored with their continued growth in the hardware space with Xbox 360 and Zune, maybe they are looking to do their own line of connected entertainment devices.
-Lastly, this could be simply an investment in a company that would help Microsoft develop reference designs and even some white label hardware products with strong integration of Microsoft software (be it MCX, Xbox or their Mediaroom IPTV or even some new platform) that the company can then turn around and offer integrated product offerings to CE brands (most likely not your top-tier Japanse or Korean brands) to resell under their own label.
Now, it likely their investment could mean all of the above are true, some are true, or none are true. I have a feeling that its most likely that some of what I am guessing holds some elements of truth to it, but only time will tell. Either way, this may be a sign they are looking to somehow extend their reach into the value chain for connected hardware even further and they apparently feel investing in a TV company may be one way to help them do it.
