By Michael Cohn

Niveus Media and Microsoft introduced high-definition media center equipment Tuesday designed to capitalize on the launch of Windows Vista and based on Intel’s Viiv consumer electronics technology.

Niveus introduced three products in its media server line at a press conference in New York City at Harvey Home Entertainment, a retailer that will be selling the equipment locally.

New York City

The products include Niveus’ Rainier, Denali, and rack-mountable Pro Series, and range in price from $3,200 to a whopping $16,000, not counting installation charges from Harvey service people.

Harvey

Even at those eye-popping prices, the systems do contain features that could appeal to home entertainment mavens who already have flat panel HDTV and high-end audio equipment.

Vista Premium and Vista Ultimate build in the media center features that Microsoft used to sell separately as part of its Windows XP Media Center Edition. But now Microsoft is touting Vista’s ability to give users access to their photos, music, videos, and other entertainment content from an interface that resembles a high-end home entertainment center and hooks up to a TV.

Microsoft has stopped short of claiming true high-definition ability for Vista, but still uses terms like HD Photo to refer to its image standard. But Niveus said its equipment is able to handle high-definition TV and is using that as a major selling point. The media centers will also work with HD-DVD discs, but not yet with Blu-ray, said Niveus CEO Tim Cutting.

Vista

“It’s a way to get your media into a home theater. You have a broadband portal to get movies, music, photos, and TV in HD,” he said.

The equipment will work with a variety of music services and video content providers, such as Napster and Yahoo Video, and even has a way of working with Apple’s iTunes service and the iPod through third-party software, an unusual ability for Microsoft software. It will also be able to hook up to digital music players like the Zune based on Microsoft’s software.

Milpitas, California-based Niveus has teamed up with one particular music service called MusicGiants, which provides high-definition music downloads that are supposed to be “lossless” so they sound almost like master recordings.

Competition from Dell and HP

To be sure, Niveus faces competition from companies like Dell and Hewlett-Packard that also sell Vista media servers for the home. But Niveus is selling a high-end experience to customers who want HD capability and for whom price is no object.

Vista

“Niveus is one of the highest end equipment makers,” said Jake Brady, a product manager at Microsoft.

Joe Sahagin, an OEM account manager for Microsoft, pointed out that Niveus is also one of the few companies whose equipment has been approved by CableLabs.

Because of that, Mr. Cutting noted, the cable TV companies have to support the equipment. The Niveus media servers are meant to plug into the cable jack in lieu of the cable set-top box by including a CableCard right inside the Niveus server.

High-end equipment like Niveus’ boxes could help Microsoft push more copies of Vista Ultimate to customers. But the Redmond giant also recognizes that most copies of Vista will be sold with new computers, not as separate upgrades.

Vista

“Only 32 percent of notebooks sold in November were capable of running Vista Premium,” noted Sam Bhavnani, research director at Current Analysis. “All the systems sold now are able to run Vista Basic, but if you upgrade to Premium or Ultimate, you might need to upgrade your graphics card or system memory. The thing that makes the most sense is to ante up and buy a new computer.”

While few people are going to run out and spend up to $16,000 on a new system so they can run Vista Ultimate, Niveus and Microsoft are hoping that at least a few of them will.