Apple heralded its official entry into the PC/TV convergence space with the announcement of the company's future iTV product in San Francisco last week, however it may face stiff competition from software giant, Microsoft Corp.

On September 12, Steve Jobs gave a demonstration at the company's It's Showtime event, alluding to a future of seamless convergence of personal-computing and digital television, all facilitated by the iTV.

The iTV solution is a challenge to existing entertainment PC players, with the most notable being Microsoft Media Center based computers. The units account for 51 percent of the combined retail desktop and notebooks sold in the U.S, according to Current Analysis.

Entering the market in November 2003, Microsoft has garnered a clear lead in terms of an installed user based over the yet to be released iTV, but Apple's strong point may be its content.

Apple holds the cards when it comes to content, T. Duboise, researcher of Current Analysis stated. He says ITV features a comprehensive package aimed at exploiting the full arsenal of digital media offered in its budding iTunes library, in addition to what is stored on a PC or Mac.

In addition to its unrivaled knack for creating glamorous, intelligible PC and CE products, Duboise continued, Apple brings content – music playlists, TV shows and now movies – which could turn out to be the key driver in breaching the living room threshold.

The Redmond Wash.-based software giant is not resting on its lead however. The research firm predicts a resurgence in Media Center's with the release of Microsoft's next-generation operating system, Windows Vista, in early 2007.

iTV iwill feature wireless technology, USB 2.0, Ethernet, component video, analog audio and optical audio interfaces, High Definition Multimedia Interface (HDMI), built-in power supply and a $299 price tag.