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Exclusive On the eve of the giant annual Consumer Electronics Show in Las Vegas, Microsoft is set to switch the focus of its Windows Media Center from standalone PC to home network hub, according to reliable industry reports received by The Register.

The news follows hot on the heels of Microsoft ditching its Smart Display (Mira), much to the chagrin of Korean LCD manufacturers. First generation Smart Displays proved no cheaper than Tablet PCs, and were just as ornery to use, Guy Kewney reported here last week.

More in-fighting at Redmond is blamed for the rethink. But just as Mira has lost out to the Tablet PC initiative, which despite insignificant sales remains a "strategic" priority, Windows XP Media Center will be folded into Microsoft's ever-changing Set Top Box strategy.

Although Register sources decline to be named, Microsoft's press preview for the CES Show looks ominous enough. The PC Media Center doesn't warrant a mention, although there's reference to a "portable media center", suggesting that Wintel will beat Apple to a video iPod.

Microsoft began pitching CE-based set top boxes to the cable industry in 1997, although the roadmap has been rewritten with each innovation. The early success of the WebTV and TiVO startups, (the former was acquired by Microsoft) caused subsequent rethinks; WebTV was folded into the MSN operation and TiVO-like functionality added to 'UltimateTV', the resulting hybrid. The Ultimate TV project was abandoned two years ago with around 400 layoffs. Last year Microsoft CEO Steve Ballmer confirmed long-standing rumors that PVR functionality would be folded into the next generation Xbox, positioning it as a home entertainment hub.

Redmond rarely buries a product line entirely, and both WebTV and Ultimate TV live on in name (you could say the PVR is in a PVS). And the PC-based Media Center is due a little more attention at CES this week, even though its long-term future looks uncertain.

Either way, the truth is far more interesting than the pre-CES headlines suggest. Talk of Microsoft and Intel "positioning the PC as a home entertainment" hub that replaces the TV will seem wearily familiar to readers, n-th time round; but a renewed focus on the set-top box and wireless media devices suggest that Wintel is now prepared to augment the digital TV rather than replace it with an x86 box.

While Microsoft can comfortably afford to juggle its roadmap, OEMs have to face the consequences, and patience appears to be wearing thin.

"We have to be more prudent in deciding whether or not to support Microsoft when it announces a new business plan," OEMs told the Korean paper ET News when they heard of the Smart Display being axed.

That's probably a sentiment HP, Gateway and a few others will be echoing today.

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