Analyst: Apple enters digital living room with 10x lead

With this month’s release of the Apple TV, Piper Jaffray analyst Gene Munster says Apple is entering the digital living room market with a 10x lead over the next closet competitor, Microsoft’s Media Center, thanks to the large amount of iTunes users. The analyst estimates that there are approximately 110 million active iTunes users, compared to 12 million active Media Center users. Munster believes the digital living room market in 2008 will be worth $4.7 billion, and is currently expecting Apple to sell 2 million Apple TV units in 2007.

“We believe iTunes is a Trojan horse media center, which will give Apple a significant early lead in the digital living room,” says Munster. “While Apple does not disclose iTunes user base statistics, we estimate that there are at least 110m iTunes users, which represents the preliminary addressable market. To compare, the closest Windows-based product is Windows Media Center, which serves as a media hub for music, TV, and movies on PCs. While the comparison is not apples-to-apples, as Media Center is part of the Windows operating system, we estimate there to be 23m Media Center-enabled PCs. We estimate there are 12m actual Media Center users. (Note: about 40% of all PCs sold in retail stores come with Media Center pre-installed.) In other words, Apple has a 10x headstart in the digital living room.”

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