CES: Can Microsoft still become a "Connected TV" contender?

Internet-connected television is expected to be one of the big stories out of this week's Consumer Electronics Show in Las Vegas.

CES 2011

Internet-connected television is expected to be one of the big stories out of this week's Consumer Electronics Show in Las Vegas.

But Apple and Google - two of the biggest companies behind the Connected TV efforts - won't be showcasing their technologies at the show. Apple never attends CES and Google, coming off of poor reviews for GoogleTV, has asked its partners to scale back Google TV news at CES while it takes the technology back into the lab.

Naturally, that gives Microsoft, which is far from being considered any type of leader in this space, the chance to jump on one of the hottest topics of the year and showcase its answer to Google TV and Apple TV - at least according to a Seattle Times column. That column read, in part:

Microsoft's going to make a splash in this market with a stripped-down version of Windows tailored for set-top boxes and connected TVs. The software is a version of its embedded device software, overlaid with the Windows Media Center interface, with media streaming and remote-control capabilities. These new Windows TV boxes have been glimpsed online since Microsoft unveiled its new embedded software lineup in April, and then again at an Intel conference in September. The boxes are expected to cost around $200 and go on sale later this year. They'll pose a serious challenge to the new Apple and Google TV devices, largely because the Windows boxes have a polished and familiar TV-program guide that makes it easy to blend and navigate both online and broadcast content.

I don't know how much of a "serious challenge" Microsoft can pose with a product that won't be launched until "later this year." Last year, Microsoft was seemingly ahead of the game at CES when it showcased the HP Slate Tablet PC, but it was Apple who set the bar on tablet computing when it launched the iPad a few months later. When the Slate finally arrived later in the year, it was targeted at businesses, not the consumers who were already falling madly in love with the iPad.

On the other hand, it's easy to forget that we're still in the early stages of the Connected TV game - and both Apple and Google, as well as companies like Roku and Netflix - are still learning what consumers (and Hollywood) like and dislike about Internet-powered TV. After all, that's why Google is going back to the drawing board on Google TV, right?

But can Microsoft learn from the missteps of the others? I'd like to think that it can but I have to admit that reports that it will use "a stripped-down version of Windows tailored for set-top boxes and connected TVs" makes me nervous. The TV product cannot be a stripped-down version of Windows - that's still the "shove the PC into the living room" approach and it hasn't worked for Microsoft in the past.

Microsoft may be new to this TV arena, but it's also coming in at the right time. Sure, Connected TV initiatives are expected to gain some ground in the coming years - but there's still an unanswered question as to whether the Internet is as ready for TVs as TVs are ready Internet. A recent report released by Display Search forecast that the category would see significant growth  - from just under 50 million Internet-connected TVs shipped globally in 2010 to more than 122 million by 2014.

But a Display Search executive posed an interesting question about the rapid growth projections - especially as issues such as Network Neutrality and broadband access seem to have crumbled in the U.S. According to Display Search:

The looming risk now is what happens if every connected TV gets used. With Netflix accounting for 20% of peak Internet traffic in the US, it’s reasonable to ask if the infrastructure can cope. Set makers need to understand that broadband access does not scale endlessly like broadcast reception.

Microsoft has had success in the living room with the Xbox 360 - but can it mirror that success with Internet-powered programming? At this point, it's anyone's game - even Microsoft's.