According to The Register, Windows XP Media Center Edition 2005, code-named Symphony, will support high definition television. In June, BetaNews reported that Microsoft's decision makers were intent on placing television at the heart of the release; however, Microsoft refuses to confirm the report at this time.

Microsoft made the Beta 2 release of the software available to testers in June, promising "new digital media experiences." One of these experiences may be digital video recording (DVR). An industry source who wished to remain anonymous told BetaNews that Microsoft may be setting its sights on TiVo.

The potential for competition with TiVo does in fact exist: Microsoft's upcoming Media Center Extender line of products is designed to wirelessly stream digital video to set top boxes, the Xbox home gaming system and compatible television sets.

Although TiVo has established a loyal consumer base, it has failed to make a dent in the mass market and sales have not met estimates. Industry analysts see TiVo's failure to penetrate the market as a weak point that Microsoft can exploit through an integrated marketing campaign.

Another perceived weakness is TiVo's reliance on telephone landlines to dial-in and retrieve the program guide, while Microsoft uses any available Internet connection.

In a recent report, Yankee Group analyst Su Li Walker documented the demise of landlines in the trend setting youth market. "Students are no longer relying on landline phones for their communication needs. One major university reported that in the last few years they have seen a drop from 10,000 lines to 1,000 lines, and are expecting to see a continuous decline in the upcoming school year," wrote Walker.

Meanwhile, other industry players are latching onto the idea of the PC as a digital entertainment hub. On the PC side of the equation, Dell's Media Experience PCs offer customers a similar interface comparable to MCE at a slightly lower cost, and SnapStream's Beyond TV software product provides TiVo-like functions - minus the subscription costs.

In addition, cable providers including Comcast are currently seeding customers with DVR-enabled cable boxes.

The Symphony edition of Windows Media Center is expected to ship by year's end, and will ostensibly be the stepping stone to the Longhorn wave of Microsoft eHome products. The Longhorn rendition of MCE is being developed under the moniker "Slalom," although further details are unknown at this time.