Monday, September 05, 2005

The Economist on The digital home

Interesting article in the Economist on "The Digital Home" that several technology companies are pushing. The conclusion is, in essence, that the CD/DVD-less home will arrive just about as quickly as the paperless office did, which is to say "not at all". This article contains several pithy observations that are utterly obvious in retrospect, but are all of the "I never quite thought of it that way" variety:
  • The decision to make software/devices (non-)interoperable is a prisoner's dilemma for technology companies. Widespread non-interoperability is perhaps a consequence of the penalty for co-operating/inter-operating.
  • From Microsoft's perspective, telcos (+ cable companies which, in the US, are not considered telcos) face a losing battle because the set-top boxes are leased to customers and therefore remain on the provider's balance sheet and there exists therefore a very strong incentive to keep these devices as cheap as possible. Microsoft has no such constraint; indeed the features-performance-upgrade-cycle complex is an area of mastery for Microsoft. If the ability to add (/keep adding) features is a long-term decisive factor for consumer choices then the telcos are in real strife. I doubt that this is a complete picture though; the telcos benefit from Moore's law too and just maybe consumers are becoming less interested in fantastically capable feature-laden products and more interested in devices that simply work as soon as they are connected.
  • Apple's insularity is perhaps not merely a result of its desire to do things its own way, but the fact that it produces its own products and services in so many different sectors makes it difficult for it to find willing partners (or unlikely for potential partners to come knocking) because Apple will almost always already be a competitor to anyone with whom it might profitably partner.