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Look at the PS3/Xbox 360, iPhone, and Pandigital Solutions

What really got me thinking about this was the Pandigital kitchen appliance announcement last week of an intelligent digital picture frame. This is a device that does a number of things that typically you would have used a PC for.

While the numbers for Pandigital are still small, if we were to start aggregating the “PC alternative” devices – from current generation gaming systems, to smart phones, to ever-smarter set top boxes – I think the total number is actually rather impressive.

Each of these represents a brand new look at the personal computer, with the Pandigital offering the extreme in terms of appliance-like experience. In the case of the PS3 and Xbox 360, these systems are partially supported by royalties (which could work in the PC space) and the systems actually improve the longer you have them up until (on a 5 year cycle) you have to replace them.

The iPhone has a different subsidy model but has a full SDK and will shortly be able to run an ever-increasing number of business applications and is centrally assured and managed by Apple. The end result should be the reliability and support costs of a phone with capabilities that grow to rival a PC, over time.

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In all cases these solutions are examples of rethinking what we used to think of as the personal computer. Pandigital is an embedded device, the iPhone is a stripped down version of the MacOS, the Xbox is a modified version of Windows, and the PS3 is a largely purpose-built proprietary platform. And all of these devices are easier to use than any standard desktop OS and they increasingly live off the cloud.

In addition, the Xbox, PS3, and iPhone have actually improved since they were launched. And, at least in the case of the gaming systems, it’s in Microsoft’s and Sony’s best interest not to obsolete them prematurely. The market has wanted to move to a 5-year hardware cycle for some time and a model that is somewhat like the game system model could actually do that.

Looking for the Trigger: Is it Google or Intel?

To make the market move we need someone to take a really big risk that has enough influence to actually move the market. Right now, the best bet is Google but there are vendors actively in the hunt for this and they range from HP, to Sun, to IBM. Google, however, is the only firm that appears to be aggressively looking at this from multi-market perspective and is approaching both consumers (who may be easier to move first) and business.

Typically you have to embrace the existing environment first and Google has kind of done that with search. They have struggled a bit with their hosted applications but they do seem to be improving and have their own smart phone platform due out shortly. They have figured out how to subsidize things successfully with advertising as well, suggesting they could hit the market with incredibly aggressive pricing. However, their enterprise site is weak and they’re light on hardware, suggesting their initial efforts may be less than stellar.

Intel, on the other hand, has their MID (Mobile Internet Device) platform coming out that (once accessorized) could create a good hardware platform for an emerging new general class of services-based product. Intel exists on both consumer and corporate segments and, while light on software, is dominant in their hardware segment. However, they don’t sell under their own brand and would need to push their solution through a number of firms. Fortunately they have most companies (including Apple) as customers, suggesting a multi-vendor plan isn’t out of the question.

Will Microsoft, Apple and Linux Miss the Train?

Microsoft has the Xbox on the consumer side and a variety of Windows derivative products on mobile and embedded offerings. In addition, as far as a new platform they have Surface, which is currently not positioned well for this opportunity but could be shifted.

They do seem to get that cloud computing is coming but don’t seem to be able to drive a .Net like effort to truly embrace it, and it could result in a vastly bigger change than the internet did (which almost bypassed them over a decade ago). It took Bill Gates himself to get Microsoft on track the last time and Bill is off doing something else this time.

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