08:50 AM

Foremski's Take: Goodbye PC, and welcome back proprietary hardware platforms to tie up hardware, software and content

By Tom Foremski for SiliconValleyWatcher

It won't be long before the personal computer is a dim memory, because the developing trend is to tie together proprietary hardware, software and content.

That's the best business model out there right now, and you can see it developing in many ways. It's being pioneered by Apple Computer with iPod and iTunes. Comcast and the cable companies are doing very well with their proprietary content/hardware bundles. And the cell phone companies are also sitting pretty with a similar approach.

The PC platform has survived to date because it has been an open platform. That situation will change very quickly, and Microsoft will be a key agent of that change.

On Monday, Microsoft discussed its next generation Xbox game console, code-named Xenon.

As described by Cnet's News.com, Xenon will be the first in a series of PC-like devices that are tied directly to games, music, movies and simple applications through mostly web-based services.

This is the trend. The PC-centric model is disappearing as digital devices designed for specific purposes &mdash such as digital cameras, cell phones, portable digital audio players, and portable digital video players &mdash don't rely on PCs as a content/communications gateway.

Instead, the developing model is to use tightly bundled hardware, software and services to provide secure digital rights management (DRM) and protected access to aggregated content. This protects against unlawful hacks and limits damage to the platform.

Microsoft said that Xenon would be more of a digital entertainment hub than the current Xbox. This would give it a ready platform for its DRM technology and for its MSN online network.

Microsoft has previously proposed inserting special chips into PCs, as part of its Palladium security scheme. But PC makers have balked at the extra cost and users won't like buying PCs with DRM technologies built in.

Those are not issues with the Xbox, which provides Microsoft with a broad platform that it can expand cheaply through hardware promotions.

Microsoft can then earn extra revenues from selling access to that platform and to the millions of users, who tend to fall into the particularly hot demographic of older (18 to 30 year old) games players.

The loser in such a future is Intel, since the platform hardware is less important than the services it channels.