Well, I called this one about the year ago (see Could Portable Media Center be the iPod Killer? ). So, now that that iPod can finally do video, what's next? Cellular phone?...Maybe! Wireless communication aka Blackberry-like e-mail? Not likely! No, I believe APPLE gave us a clear signal of where the iPod is headed but very few people even noticed. In much the same way as the iPod+Photos signaled the move to video, the next indication of where the iPod is headed came from the new iMac that was introduced. The next major iPod will be in your living room!
Notice that the new iMac has a remote and functionality (called FrontRow) similar to a media center PC without the TV viewing. It wouldn't at all be a far reach for APPLE to take the iPod functionality, add TV viewing and DVR capabilities, wrap it all up in a gorgeously design home appliance, allow it to sync content (music, TV, video, etc.) with your existing iPod and you have one compelling experience that would be hard to beat. APPLE knows that no one will pay twice for TV shows that are already coming into their homes, its just a smoke screen much like the recent Motorola phone with iTunes. APPLE knew it was a dog and would never pose a threat to iPod sales. But what people will pay for is an iPod media center device that brings everything together in their living room and when they decide to go mobile, the experience will be seamless.
So, where does all this leave Microsoft's Media Center and Portable Media Center (PMC)...well like everything else, we have to wait for Vista to know for sure but APPLE sure seems to have the upper hand even though they don't have a full media center device today. But I suspect that when they do, those 28 millions iPod users will all want one. Can we say the same to the next PMC?