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For consumer electronics industry, digital home is the next big pot of gold, a pot so big that it has everyone from Apple (AAPL) to Microsoft (MSFT) to Intel (INTC) licking their chops. But it is Linux could emerge as one of the biggest winners in this bonanza.

The demand for networked CE devices is going to increase in tandem with the availability of faster in-home networks that can shunt data at blazingly fast speeds. Technologies such as MOCA, HPNA 2.0 and 802.11n will allow us to move content from one device to another.

As a result of that, we should expect the demand for the Home Media Servers and Entertainment Hubs could grow to be a $44 billion business in 2011, according to ABI Research. (Well, don’t pay much attention to the mega-billion number, but instead focus on the trends!)

ABI says that the digital media server market is made up of four main categories: PCs, set-top boxes, consumer electronics devices such as gaming consoles or PVRs, and Network Attached Storage (NAS) hardware.

“Linux as embedded OS should take up a substantial part of the set-top box and CE market, but not the PC,” says Michael Wolf, principal analyst with ABI and author of the study. Who wants their PC to be their media center? Okay, at least not us. The logic is simple – the other two players – Apple and Microsoft will have their own proprietary systems. Apple will not share them with anyone else, of course! Microsoft would as long as you play ball with their DRM system or some other lock-in. (And they are not to be taken lightly.)

This leaves CE makers, and start-ups with one option – Linux. The embedded Linux has already been adapted and widely deployed in everything from Sharp PDAs to Motorola Mobile Phones to set-top boxes. Many of the newer digital music systems such as Sonos are powered by the little Penguin. TiVo, for example is based on a version of Linux. So is DirecTV’s set-top box! Moxi, is another set-top box maker that uses Linux. AT&T HomeZone is powered by Linux as well.

Scores of other start-ups are experimenting with Linux-based home entertainment systems, music players and digital video recorders. IntAct, a spinout from set-top box maker, Amino has just started selling a Linux-based software stack that runs on any kind of chip, and can also run Opera browser. And there are many more similar packages out there, or under development.

The signs are pointing to a Linux-powered living room. Do you agree? (Take our poll.)