Wave Systems Corp. (fka WAVXQ)

[barge]

Ron Enderle mocks Apple's iPod & Praises MS/JANUS.

Enderle points out that Apple's iPod DRM is easily hackable. And if Apple doesn't get their DRM act together then "Apple's players will become obsolete even before they are launched."

ON THE OTHER HAND, ENTER INTEL AND MICROSOFT(JANUS)!

"Intel and Microsoft believe they can do one better have are showcasing what will likely be the hot product for Christmas in 2004 the Portable Media Center."

COULD IT BE THAT INTEL AND MICROSOFT(JANUS) HAVE SOME SORT OF HACK-PROOF PORTABLE DEVICE WAITING IN THE WINGS?


"Much like the record industry has been very difficult to deal with in regard to legal music downloads the film industry has been near intractable in their position that movies should be restricted to theaters and the DVDs that they originate on. The idea of downloading movies to devices continues to scare them half to death but they appear to like Microsoft’s DRM scheme and, with Intel’s support, it appears this platform will fly."




http://www.enderlegroup.com/perspectives/pers_29.htm

Perspective: Microsoft's Portable Media Center - Updating the iPod
The iPod set the market on its ear and woke it up to the idea that consumers wanted new and interesting things to do with their music. Much more portable and easier to use than many of the portable CD and flash MP3 players that were on the market the iPod not only took the Apple customers by storm setting not only sales but return records the first year of its existence. (The returns were from Windows users who bought the things for Christmas on that first year and didn’t realize it wouldn’t work with a Windows PC).

Of course I'm comparing the old iPod to a device that folks won't get a good look at until CES in January, and at Apple is expected to have their own product announced before year end. Given how poorly the MP3 hard drive players have done so far against the iPod, calling this race early, particularly if that call went against Apple, would be foolish.

Apple's problem will be with their DRM solution which has been hacked and the emergence of Microsoft's as a standard (Apple won't license theirs). Regardless of hardware design, if the movie industry doesn't support Apple's approach or pulls their support due to concerns about its vulnerability or breadth of use Apple's players will become obsolete even before they are launched.

Intel and Microsoft believe they can do one better have are showcasing what will likely be the hot product for Christmas in 2004 the Portable Media Center. While this product will be slightly larger than an iPod it not only will play music but movies, slides, TV shows, and possibly some games (it does have some processing capability). Now we have had hard drive based movie players on the market for a few months and they haven’t been too exciting because they have lacked a critical feature, you can’t get movies on them very easily.

Much like the record industry has been very difficult to deal with in regard to legal music downloads the film industry has been near intractable in their position that movies should be restricted to theaters and the DVDs that they originate on. The idea of downloading movies to devices continues to scare them half to death but they appear to like Microsoft’s DRM scheme and, with Intel’s support, it appears this platform will fly.

When it shows up it will face a rather impressive amount of competition. As you would expect Apple is not taking this lying down and they have their own product in the works, having seen what they can do with an industrial design and recalling what some of the initial Pocket PCs looked like, Apple could clearly have the more compelling product. However, Apple likes to favor Apple PCs in the first round and, much like was the case with iTunes, will probably give Microsoft’s partners substantial time to get the product right before they enter the WinTel side and, by then, it will likely be too late.

The scarier player is Sony. Sony’s product, which will also be a portable Play Station 2 player (Sony PSP), could be a segment buster because of the gaming capability it will have. Apple has nothing in their portfolio to match this gaming capability and, while Microsoft has the XBox, there is no plan to put XBox level gaming in their initial device.

Another interesting product, because it is in the market now, is the Tapwave Zodiac which can play games and movies as well as do all of the wonderful PDA things that a Palm is capable of. Unfortunately the games are not up to PS2 or XBox standards and getting a movie on this thing would require capabilities that exceed my own. Still, it is available now which is more than can be said for the Sony and Microsoft/Intel devices and will clearly mature over the next year.

Of course if you really want to try a full blown media player this year Archos has two out, one at $599 and the other at $899, but I’m thinking that at $899 I’d probably rather have a laptop computer and it probably will play movies about as well as the Archos and the $599 device just seems to limited to me right now for something that won’t work well, or at all, with DVDs.

Now if the device had PDA capability, played advanced games, ran Microsoft Office, and had the multi-media features in a pocketible device you’d have a….. Drum roll please….. Modular computer and these are expected in the market from companies like OQO (interestingly enough a company founded by ex-Apple guys, who left when Steve Jobs said no to their idea) during the same time frame running Windows XP Tablet PC Edition. They’ll sell for about 3X what one of these media devices sell for initially but they may do to this class of device what low cost laptops with DVD drives did to the portable DVD drive market (kill the higher end products).

However we get there, the one thing I’d bet on, is that in 2004 I’m sure as hell going to have a device I can carry in my pocket to not only watch the PVR recorded shows I missed, but the DVD movies my wife doesn’t want to watch, and the music I enjoy the only questions are, will it also play games, and who will do it right first.



Rob Enderle 12/17/03