Analysts said they expect the so-called "rule of three" to hold true where the Media Center edition is concerned. The rule holds that Microsoft requires three versions of a particular product to get it "right." Analyst firm IDC, based in Framingham, Mass., forecasts that 1.5 million Media Center-equipped PCs will ship during 2004a forecast based on actual sales from the first two quarters of 2004 and projections based on holiday sales from last year. IDC estimates that Microsofts actual sales are lagging behind that prediction, said IDCs Roger Kay."The proportion of that due to Media Center is dependent on three key areas," he said, including the experience of how everything works; the ecosystem, or how it interacts with the underlying code and accompanying devices; and the price. Kay said Microsoft delivered final code to him a week ago. The verdict? "Version 3 is better than the other two." That doesnt mean the software lacks problems. Kay said his New England cable ISP, Comcast, delivers an electronic program guide that doesnt interface properly with the Microsoft software. One of the key issues is whether consumers will lean toward the new Windows Media PCs or see the same functionality already present in PVR boxes from their existing satellite or cable providers. Microsoft continues to walk a fine line between offering the functionality of a PC and the simplicity of a dedicated box, such as devices by TiVo and ReplayTV, said Van Baker, an analyst with Gartner Inc. in San Jose, Calif. Like the Windows Media PCs, new TiVos can view photos stored on PCs and share content across other receivers on the network. Click here to read about home-entertainment hubs that use Wi-Fi. Microsoft hopes to one-up the PVR community by offering integrated DVD- and CD-burning functionality within the Media Center OS, instead of forcing consumers to leave the application, according to Sean Alexander, a Microsoft technology product manager who joined Gates onstage. "Its a pretty nice product," Baker said. "From our perspective, however, we still view it as a niche product. Its single biggest strength is also its biggest weakness: Its a programmable device. That means if I try out this game, suddenly my television doesnt work anymore." Baker said its likely that Microsoft and hardware OEMs will take advantage of Vanderpool, a virtualization technology designed by Intel Corp. that will be included in its microprocessors by next year. Rival Advanced Micro Devices Inc. has its own virtualization technology, dubbed Pacifica. Both Vanderpool and Pacifica are designed to allow two or more instances of different OSes to boot concurrently. Although the most popular usage scenario involves dual-booting Linux and a Microsoft OS, another scenario is dual-booting Windows XP and Windows Media Center, he said. Such a scenario also would allow Microsoft to charge OEMs for two OSes per machine, he added. Dell Inc., Gateway Inc., Toshiba and others will offer Windows Media Center hardware. Dell, of Round Rock, Texas, will offer the software initially only in its third-generation Dimension desktops, although the software will be offered as a standard option in the XPS, Dimension 3000 and 8400 by the end of the year. While other manufacturers have designed rack-mounted systems, most consumers will end up managing their content from their desktop, and watching multimedia with a Media Center Extender, said Dell spokesman Liem Nguyen. Dell also unveiled three new Axim handheldsan "entry-level" and "midlevel" X50, and the X50v, all based on the Intel PXA270 processor. The devices are the first to include the Windows Media 10 Mobile software running on top of the Windows Mobile 2003 Second Edition software, Dell said. Meanwhile, Hewlett-Packard Co., which helped design the Media Center with Microsoft, announced the HP Digital Entertainment Center z500, the HP Media Center m1100 Photosmart PC and the HP Media Extender x5400. HP released two models of the Digital Entertainment Center: the $1,499 z540, with a single NTSC tuner, and the $1,999 z545-b, with a pair of standard-definition tuners and the HP 160G-byte Personal Media Drive. The m1100 PC and the Media Center Extender cost $999 and $299, respectively. "Its not surprising Dell would say that, as they have no product to compete in this space," said Ameer Karim, director of worldwide product marketing for HPs consumer PCs. The Digital Entertainment Center is designed not just to emulate a stereo component from the front, but also from the back, he said, with over a dozen ports. Editors Note: This story was updated to include hardware details and comments from Microsofts Joe Belfiore. Check out eWEEK.coms Windows Center at http://windows.eweek.com for Microsoft and Windows news, views and analysis.
On the other hand, if sales of TV tuner-equipped PCs are included in the mix, then its likely that the industry has sold 2 million TV-equipped PCs already this year, including those using other operating systems, Kay said.