Put Your NIC in a Box

6:00 PM -- Sometimes I have to wonder if Microsoft Corp. (Nasdaq: MSFT) doesn't sometimes wish it had still had a stake in the consumer WiFi hardware market. Sure, SOHO wireless LAN is a low-margin, high-volume business that Redmond was probably smart to exit when it did. Still, having a WiFi kit business would be very useful across several markets for Microsoft right about now. (See Microsoft's Wireless Home.)

One particular device that would see instantaneous benefits would be the Xbox 360 games console. It's pretty clear to me that the next version of the Xbox has to have the slickest 802.11n capabilities that money can buy built right into the box if Microsoft is to compete with Apple Inc. (Nasdaq: AAPL), Sony Corp. (NYSE: SNE), and many others in the rapidly expanding home networking and content delivery market.

Microsoft is already pushing the games console as a hub for multimedia entertainment in the home -- from basic stuff like playing DVDs to the IPTV streaming the firm talked up at CES. For a start, Microsoft already offers an 802.11a/b/g adapter for Xbox 360; next, the firm needs a "pre-n" adapter and then WiFi baked right in the box.

Startups like Ruckus Wireless Inc. have cottoned to the potential of streaming HDTV signals over the Xbox. The firm uses its smart-antenna MIMO-based MediaFlex adapters to stream content to the console. (See Ruckus Demos at CES.)

Microsoft, however, can't afford to wait around for these third-party applications to evolve and make its console into the next-generation set-top box. Apple is already setting the pace with its "pre-802.11n-compliant" Apple iTV streaming box. Redmond needs to buy or build something to stay on top of the competition. (See Telcos Should Watch Apple's iTV .) — Dan Jones, Site Editor, Unstrung

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