Microsoft 'plans home console'

Gates previewed new products at the Consumer Electronics Show

Microsoft is to launch a multifunction home entertainment console that will offer virtually every kind of electronic home entertainment, says a report.

Though the software giant is keeping quiet about its plans, a study by Prudential Securities analyst Hans Mosesmann says that the HomeStation could revolutionise the PC market.

And the device could be on the market by early next year, says the report.

But Microsoft has dismissed the report as having "absolutely no truth".

Bill Gates: Planning the succesor to Xbox?

Mr Mosesmann's report said the HomeStation will be based on the Xbox design, which is similar to a PC and uses standard PC components.

But as well as playing Xbox games, the HomeStation would act as a digital video recorder, similar to devices from TiVo and Sonicblue's ReplayTV, and could perform internet functions such as e-mail and net surfing.

The device will also be able to play DVD movies, streaming media and digital music files.

And the Xbox would be capable of most of the new functions with only minor changes, according to Mr Mosesmann.

"You would just add some connectivity there, a bigger hard drive, some video recording software, some Bluetooth - and voilą, you've got something that can be marketed as something else," said Mr Mosesmann in an interview.

Jukeboxes

Based on what he has said are unofficial discussions with Microsoft suppliers, Mr Mosesmann expects Microsoft to announce the HomeStation late this year and have it on the market next year.

Xbox launches in Europe on 14 March

The HomeStation would fit into Microsoft's plans to turn PCs into digital entertainment jukeboxes for the home.

The field for such devices has become competitive since the recent launch of the Moxi, a combination device which promises a similar package of home entertainment media.

Some analysts doubt that Microsoft intends to launch such an ambitious product before establishing its games console Xbox more firmly in the market.

'Long term'

The Xbox, Microsoft's first venture into the world of game consoles, is generally seen to have had a successful launch, with 1.5 million units sold since mid-November.

A spokeswoman for Microsoft in the UK Told BBC News Online: "There is absolutely no truth in that rumour.

"We have always said that the Xbox is a games machine; it is not a PC in disguise.

"Who knows what we will be interested in in the long term but we have nothing like that in development."

In his keynote address at the recent Consumer Electronics Show in Las Vegas, Microsoft boss Bill Gates presented two new technologies designed to convert PCs into a jukebox for video, music and pictures - suggesting that the company's sights are now firmly set on the home market.