"I don't think that consumers are asking for faster memory or a new bus, they're asking for a great entertainment experience," said Marty Seyer, general manager of AMD's microprocessor business unit. "We don't see any innovation that is going to be announced next week that we haven't already released."
At the same time, IBM has pushed Intel out of the video game market by sewing up microprocessor deals with both Microsoft and Sony for their next-generation systems. Because video game consoles will have many of the same audiovisual features that Intel is hoping to add to next generation PCs and will be heavily subsidized by the sale of videogame software, they may reduce the need for a high-end entertainment-oriented personal computer in many homes.
"Consumers don't buy chips, they buy systems," said Nick Donatiello, president of Odyssey, a San Francisco-based consumer electronics market research firm.
The challenge for Intel's plans to make the PC the home's entertainment media server, he said, is that wireless data standards are not yet ready to move video data seamlessly around the house.
In addition to offering consumers an entertainment media server, Intel, in demonstrations here on Thursday at a news media and analyst briefing, showed a personal computer that is designed to fit in stereo cabinets and looks like a cable or satellite set-top box.
However, Siu said the prices for such systems would start at about US$700, far above the costs of digital video recorders and video game machines that are now finding their way into the living room.
At the same time, the PC model for the home does have important backers.
"There is a strong catalytic value to Intel stepping up and saying, `We are going to create these integrated systems with stuff built in,'" said Rob Glaser, chief executive of RealNetworks, the Internet audiovisual service. "The PC as the smart hub in the home has basically happened."
Despite moving in the right direction, some analysts and industry executives also suggested that Intel might be out in front of the market, which will be cautious to adopt some of the features that are in its new chips.
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