By Joe Wilcox; special to ZDNet News . . .

Microsoft will take yet another step down the consumer electronics path on Monday with the demonstration of a customized version of Windows XP tuned to digital entertainment.

At the Consumer Electronics Show, which began Monday in Las Vegas, Microsoft Chairman Bill Gates will show off a prototype consumer interface for Windows XP, code-named… Freestyle, according to the company.

The new interface is intended to turn PCs into home electronics or entertainment systems by offering direct access to the digital entertainment features of Windows XP.

Instead of the usual Windows desktop, Freestyle features a series of large buttons, visible from across a room, that in conjunction with a remote control can be used to launch a video, play a music file, access digital photos, watch and record TV programs, and view DVDs.

All of that digital content “is for the mass-market consumer but is really lost in the PC,” said Jody Cadieux, a marketing manager in Microsoft's eHome division, the 11-month-old unit tasked with using Windows XP to close the gap between consumer electronics devices and PCs.

While no launch date has been set, at least three PC makers — Hewlett-Packard, NEC, and Samsung — are planning to develop products using Freestyle.

Gates is expected to show off Freestyle while also demonstrating Mira, a tablet-like device that acts as a bridge between PCs and televisions. Mira, now in development, will serve as a complementary product to a Freestyle-based PC, and will deliver Internet content, serve as a portable game player in conjunction with Microsoft's Xbox video game console, and allow consumers to shop online, view program listings, and perform other tasks.

While Microsoft is making a lot of noise about the long-expected convergence of PCs and digital entertainment, analysts said huge obstacles stand between the software maker and mass-market acceptance of PC-based home entertainment systems.

Previous attempts to tackle the home entertainment market have fallen flat. Compaq Computer and Dell Computer, for example, tried unsuccessfully to woo consumers with stylish PCs focused on entertainment.

One reason: PCs are still hard to use and not as reliable as most consumer electronics products. “Remember, the standard is consumer electronics,” said IDC analyst Roger Kay. “Even if you have a stack of remotes, the things basically work. If with Windows XP you end up with a more complicated interface, or one that fails occasionally, it's dead meat.”

Also, several analysts said, it's still unclear whether consumers are ready to make the transition to using their PCs as all-encompassing digital entertainment devices.

“That (Freestyle) interface sounds like a great idea, but I don't think having it PC-centric is the right way to go,” said Stephen Baker, an NPD Intelect analyst. He said a more practical approach might be to access digital entertainment stored on PCs via a television, not the other way around. HP's Entertainment Center and the Compaq iPaq Music Center work this way, he pointed out.

Baker also said consumers don't upgrade their electronics devices as frequently as PCs, meaning that even if new Freestyle-enabled devices catch on, it will be years before technology makers see sales reaching the same heights as in the business system market.

“Everybody has to be (aware) that this is not the computer market and the path to mass-market nirvana when you're talking about replacing products,” Baker said. We're talking years and years to reach penetration rates that Microsoft and some of these guys will think is acceptable. Information technology companies traditionally have not been willing to take the hit and build the market like that.”

Still, Kay said he isn't surprised at Microsoft's determination to open up the living room to Windows in the same way the company has captured the business computing market.

“This is a long-time goal of Microsoft, and in some ways, the whole PC industry,” he said. “Their whole value proposition is home entertainment running through the PC, so creating an interface for an easier control device really makes sense in terms of the strategy.”

Microsoft believes that with Windows XP, which is more stable and manages memory better than its predecessors, system manufacturers will have what they need to begin to seriously target the consumer electronics market.

“We've been working on these kinds of scenarios and what it is consumers want for the past nine years,” said eHome Vice President Mike Toutonghi. It's “only recently with XP that we've finally been able to create those experiences in a way we can finally bring them to market in the near future.”

Microsoft believes consumers' familiarity with Windows XP will help the transition from PC productivity device to entertainment center easier.

Now playing

A prototype version of Freestyle seen by News.com featured a menu of four choices: TV Home, My Music, My Pictures and My Video.

Through the My Music feature, for example, Microsoft hopes to free consumers from cumbersome playlists, offering a more visual way of managing and listening to digital music. My Music remembers the most recently played songs, which are accessed by clicking on an album cover image. A similar technology is already included on the Windows XP Start Menu.

To make the My Music feature more popular, Microsoft must win over content providers. “We're really going to have to work well with the partners, the content owners, and rights owners and make sure we have a combination of digital rights technologies that address their needs as well as being easy for consumers to use,” Toutonghi said.

Another new feature is Now Playing, which displays the album cover on the screen and plays the song continuously while other features are used.

The My Photos feature is little changed from the typical Windows XP interface. Consumers use the feature to retrieve, store or print images from digital cameras.

The biggest change may be Microsoft opening up TV programming and recording functions that could eventually compete with the company's own Ultimate TV service.

“We're expanding the Windows XP experiences not just from photos, music and videos to TV,” Cadieux said. “TV code has been in the Windows code base for some time, so what we're doing is giving users a way to access that.”

In addition to watching DVD movies, consumers would be able to access programming from a TV guide and record shows to their hard drives.

Cadieux said the function “in no way replaces Ultimate TV whatsoever. Right now, we're just previewing these services. We haven't gone to the next step (of defining) the 20 different services we can plug into this.”

Cadieux would not discuss future products or a delivery date for Freestyle, but “the first round will definitely be PC-based,” she said.

Besides HP, NEC and Samsung, Cadieux said, Microsoft is working to sign up other manufacturers to use Freestyle. “That's not an exhaustive list, but you'll hear more about partners over the coming months,” she said.

CEOs from two of the companies, Samsung and HP, are delivering keynote addresses at the Consumer Electronics Show.

While enthusiastic about Freestyle, HP plans to start off slowly.

“What we'll be focusing on this first product will fundamentally be a PC plus lots of entertainment,” said Tom Anderson, HP's home products marketing manager. “It will either be delivered through your PC or the connection to your television set. The college dorm room is a potential place to use this kind of entertainment center.”

Copyright © 2001 CNET Networks Inc. All rights reserved. Used with permission.

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