Analysts noted the timing of the announcement, Microsoft's second regarding digital media this week, is interesting given Apple Computer's Macworld trade show opens on Wednesday. Windows Media Center "really hits Apple where it hurts," Jones said. "Apple has been working really hard to establish themselves as the digital media hub with iTunes and iPhoto. Everyone knew digital media was going to be big on Windows XP, but to layer on some very simple interfaces you can access by remote control from across the room really hits Apple where it hurts." Apple has positioned the Mac as a digital hub for connecting cameras, camcorders and music players and also for making movies or burning them to DVDs. PC makers created the strategy of using a computer in this market but so far Apple has come out with more software and more actively promoted the idea. Technology Business Research analyst Bob Sutherland said "that Microsoft is trying to play catch up with Apple." He also noted that timing of announcement months away could be designed to draw attention away from Macworld and Apple's digital media strategy. Some of the new features on Windows Media Center would be hard for Apple to easily dismiss, Jones said. Using a remote control, consumers would be able to listen to digital music, work with digital photos, create movies or watch DVD movies or TV shows. "Apple was offering remotes with their PCs, like in the early '90s," Jones said. "But with the penetration of broadband and the ability to watch DVD on PC now makes it more relevant." Windows Media Center also comes with a digital personal video recorder (PVR) that serves up TiVo-like features, as long as the PC contains an additional TV tuner card and other hardware. PVRs, which let consumers use online guide to schedule shows for recording ahead of time or to stop or replay live action programming, are not new to PCs. Sony ships several Vaio consumer PCs with its GigaPocket PVR. On Monday, El Gato Software launched the first consumer PVR for the Macintosh market. But PC PVRs, like their TV counterparts, aren't big sellers. NPDTechworld analyst Stephen Baker said that at retail, "the volumes on these are pretty low, usually 10,000 units a month or so." Eventually, though, PVRs, or at least PVR capabilities, could be commonplace. Customers who use them like them, according to many market surveys. In two to three years, all the electronics for using a PC hard drive like a PVR will be included in a computer's chipset, according to Sean Maloney, general manager of Intel's Communications Group. If Microsoft's software continues to evolve, consumers could find themselves buying a PVR every time they buy a PC. The programming guide for Windows Media Center's PVR "offers at minimum, seven days free," Cadiuex said. "We're a not offering" an enhanced for-fee programming guide. "But it's a platform for partners to offer it." In an interesting twist, Microsoft will not license the decoder for DVD playback, a policy it started with the official release of Windows XP last year. "We're still going to be using somebody else's," Cadiuex said. Then again, taking on the cost of the decoder fee would be a big expense given that 42 percent of PCs with Internet access have DVD drives, according to Yankee Group. "If Microsoft were to take on that licensing fee, it would be a fair chunk of change," Jones said. Hewlett-Packard and Samsung are among the computer manufacturers developing Windows Media Center PCs. Cadiuex would not reveal pricing, but she estimated it would be between $1,000 and $2,000.
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