From Yahoo news:
Microsoft (Nasdaq: MSFT) is going in a hyper-announcement mode: it is announcing its plans to help launch a new line of "media extenders", which are TV set-top boxes which will connect wirelessly to PCs running the Home Premium or Ultimate flavors of Windows Vista and enable users to use their TV sets to watch movies, online video and other content stores on PCs. Essentially something like Apple (Nasdaq: AAPL) iTV.
MSFT launched a different line of extenders a few years ago for the Windows XP Media Center Edition, but it never took off.
This announcement is interesting for a number of reasons. Various publications have indicated that Apple's set top box, the AppleTV, has been selling poorly. In the absence of information from Apple, I am disinclined to attach any validity to rumors about AppleTV unit sales. I AM inclined to believe that the future of TV will involve IP transmission. I would be very surprised if, in ten years, we are still receiving most of our TV content by analog cable or broadcast over the air waves. IP delivery of content offers (eventually) enormously increased choice of content and, potentially, more freedom from intrusive commercials. Google's (NASDAQ:GOOG) YouTube certainly gives us a glimpse of the future; at any time, You the User can select from hundreds of thousands of videos to watch. Maybe you want to watch a clip of Sonny Rollins at the Blue Note. Now. You can do it.
It appears that both Apple and MSFT have a similar vision that this is the future. I think, the future is not now, and adoption of this new model will be gradual, but inevitable. Certainly, this validates the concept.
My first take is that AppleTV seems much better positioned at this time. The MSFT box may be tied to Vista, like the legendary albatross tied to the neck of the Ancient Mariner. And one can bet, configuring it will be anything but straightforward.