Another battle is heating up between Apple Computer and Microsoft, and the winner is likely to be consumers who are getting more options...

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Another battle is heating up between Apple Computer and Microsoft, and the winner is likely to be consumers who are getting more options for entertainment-oriented computers.

Yesterday, a day after Apple unveiled a new iMac with entertainment features, Microsoft announced a free update to the Media Center system it’s been selling since 2002.

Both systems play videos and can be operated with a remote control. Higher-end versions of Microsoft’s product can also work like a TiVo, recording and pausing TV shows, and both can transfer videos to portable devices such as the video iPod that Apple also introduced yesterday.

Microsoft blazed the trail, but its systems were slow to catch on until its TV quality improved and Media Center PC prices fell below $1,000 over the past year.

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“I was surprised that it took them [Apple] as long as this to do a feature like Media Center,” said Joe Belfiore, general manager of Microsoft’s eHome division.

Belfiore welcomed the new iMac, saying it will raise consumer acceptance of the Media Center concept to have more products available. But he isn’t particularly worried about losing sales, because the iMacs are expensive — from $1,299 to $1,699 — and Microsoft gets a higher volume of sales from lower-priced products.

“I think it won’t significantly eat into our volume, but of course we’ll wait and see what the market does,” he said.

Apple representatives were unavailable for comment.

Microsoft also said Media Center sales rose at retail stores during the back-to-school season, accounting for 46 percent of the desktop PCs sold at U.S. stores during September, according to data the company relayed from Current Analysis, a San Diego research firm.

Altogether, Microsoft has sold 3 million copies of its Media Center operating system, but that’s just a tiny fraction of its overall Windows sales.

“They do 150 million PCs per year — it’s like a rounding error,” said Al Gillen, an IDC analyst who tracks PC sales.

Gillen expects total Windows sales to grow an average of 6.8 percent a year, reaching 176 million copies in 2009, up from 127 million in 2004.

Apple’s computer sales are growing fast but remain small compared with Windows. The company sold 3.3 million units in the nine months ending June 25, including 1.9 million desktops.

Unlike Apple, which produces complete systems such as the iMac, Microsoft produces only the Media Center software. PC makers have used the software to create systems in laptops, desktops and entertainment-center devices roughly the shape of a VCR.

A highlight of yesterday’s Media Center update is software to sync the systems to the Xbox 360 consoles going on sale Nov. 22. The systems were designed to work together, so users can play video, music and photo content stored on their PC through a separate TV connected to the Xbox.

The upgrade also enables the systems to have four TV tuners, including two high-definition tuners, so users can watch and record HDTV at the same time.

The new software, available today at, also adds support for external DVD changers and new power-management features.

Although Apple’s new iMac features are similar in concept to the Media Center, they’re different systems, said Mike McGuire, a Gartner analyst in San Jose, Calif.

“It’s certainly a step in the direction of what Microsoft is trying to do,” he said. “While they sit in the same market segment, they’re very different takes on that type of product.”

Which will be more popular?

“It’s going to come down to a matter of personal taste,” McGuire said.

Brier Dudley: 206-515-5687 or