"We don't fear a better open source player because we believe we could stay significantly ahead"
Hmm... I'm not so sure IMHO.
There are roughly 20,000 Microsoft employees and there products are full of bugs, holes, security flaws and other issues. Anyone who wants to help improve any open source programs can (Linux). As soon as a bugs are found, they are squashed. The code is always improving due to the sheer number of people working on it, and this worries MS (see the Halloween documents).
Open you source code - let everyone in the world look at it, improve it, optomise it, debug it and send it back.
What you end up with is solid, fast, small, efficient, flexible, powerful code for your hardware.
Combine this with updates for registered users and you have a winner.
I would gladly pay more for a hardware that has software support like that.