Apple, iTunes and Competition [Archive]

SiliconAddict

Oct 13, 2004, 12:52 PM

Apple is doing well right now. Check that extremely well and because of that they should be concerned. I've always gotten the vibe that Apple is a rather arrogant company. Nowhere near as bad as MS but its there. They CANNOT sit on their laurels and pat themselves on the back. Microsoft is about to enter the market. This is the 90% market share company. They will use every slime ball trick and tactic to screw Apple over.
Apple needs to bring their A+ game to this battle. There is no room for Jobs to act like an arrogant sob. For once he needs to suck it up and act like a businessman and make deals to keep the iPod on top. HP was a good first step. As was the deal with moto's phones. It's not enough. If MS wants to go at this hardball they could pour $1,000,000,000 into this endeavor. A company like Microsoft who has no realistic cash limitations HAS to be taken seriously. Apple needs to continue to make partnerships and expand into new territory. (Flash players. Sorry guys but this IS a vulnerable area for Apple.) And I think it’s a bad idea that they are waiting for 50% of the market to fall to another player before doing something with FairPlay. They have some companies itching to license FairPlay. Why the heck would you wait until demand starts to wane to license it?!? That makes no sense. They need to take advantage of how hot the iPod scene is right now.
Apple can stay on top if they play their cards right. Lets be honest here guys. Until MS, Apple has had no competition. Napster and Music Match were and are a joke. This Fall and next Summer is going to be the first true test of how sustainable the iPod\iTunes powerhouse really is. Here's hoping Apple cleans the floor with Microsoft's butt.

bcsmith

Oct 13, 2004, 12:54 PM

I'm totally behind Apple, but what would we be saying if Microsoft were in Apple's place right now? I'm sure someone would bellyache about a possible monopoly. I call dibs on the thimble.

Market share alone does not make you an illegal monopoly. There are a few competitors out there and there are more on the horizon. As long as companies feel that there is a buck to be made, and they are able to enter the marketplace, they will.

Also, not all monopolies are illegal. Abusing your monopolistic position is. If Apple is the last company standing in the online music download market - which might happen, but it is more likely that there will be a couple of people left - this would not be illegal, or neccessarily a bad thing. It's what they do once they find themselves in that position.

-- Ben

monkeydo_jb

Oct 13, 2004, 12:54 PM

This has been an area of criticism for 3rd party music stores such as Real Networks and the MSN Music service.

People always criticize what they themselves can't attain.

liketom

Oct 13, 2004, 01:01 PM

good stuff , what happend to the Beatles law suit ? was a deal struck ?

swissmann

Oct 13, 2004, 01:14 PM

When are some of these ITMS and iPod wannabes going to die. I thought it would have happened by now - maybe it has and I just don't know about it. Or maybe a small percentage of market share is still profitable???

jxyama

Oct 13, 2004, 01:18 PM

Microsoft is about to enter the market. This is the 90% market share company. They will use every slime ball trick and tactic to screw Apple over.

to beat apple, M$ will need to first make an mp3 player that can beat iPod.
to be blunt (not to you), music download services make no difference - in the end, majority of users will not care where the music comes from as long as it's on their favorite music player.

90% windows share won't make any difference because iPod/iTunes is already available on windows. their financial assets will. just like xbox, M$ will need to start from the hardware...

unless, of course, they are willing to offer WMA tracks for 25 cents and bleed money left and right... (pricing their music slightly below iTMS' 99 cents won't make any difference. it has to be a LOT lower to convince people to give up their iPod, which many people are apparently willing to pay the premium for.)

Stella

Oct 13, 2004, 01:30 PM

I'm totally behind Apple, but what would we be saying if Microsoft were in Apple's place right now? I'm sure someone would bellyache about a possible monopoly. I call dibs on the thimble.

I think apple should absolutely license out Fairplay. Doing just this could put a large dent into microsoft's drm.. more, Apple should offer it back to the music industry to make it non propriority and completely open.

thatwendigo

Oct 13, 2004, 01:31 PM

to beat apple, M$ will need to first make an mp3 player that can beat iPod.
to be blunt (not to you), music download services make no difference - in the end, majority of users will not care where the music comes from as long as it's on their favorite music player.

90% windows share won't make any difference because iPod/iTunes is already available on windows. their financial assets will. just like xbox, M$ will need to start from the hardware...

No, they don't, because the iPod is a hardware device that accesses the computer directly instead of acting totally on its own. All that Microsoft needs to do is make it as easy on anyone that wants to license WMA as they can, perhaps even going the route of getting everyone they can onboard for free and then "accidentally" breaking AAC on Windows. With their ridiculous bank account, they could then partner with a hardware provider and offer a buyback program for iPods with the promise that, if people will go with this other player, they get 40GB for half the cost of the iPod.

Meanwhile, Microsoft tells any tech publication that they'll pull advertising if they run stories on the iPod, offer extra money and support contracts if they'll promote the "alternative" device, and pursue the legislative route to slam through a bill with their increasingly pervasive lobbying so that all hardware players require vetting by the FCC. The new law could be something as simple as requiring some Microsoft "technology" that has to be licensed, and then not allowing Apple to touch it, no matter how much money is offered.

Anti-Trust? They've got the cash and legal clout to drag out a court battle long enough to kill the iPod, if they can even accomplish half of what I just spun out.

unless, of course, they are willing to offer WMA tracks for 25 cents and bleed money left and right... (pricing their music slightly below iTMS' 99 cents won't make any difference. it has to be a LOT lower to convince people to give up their iPod, which many people are apparently willing to pay the premium for.)

Actually, they could just price low until the market share drops enough and they get people locked in (like they have them with Office), then charge even more. Even if they didn't do that, the TCI/Palladium DRMed layers that will likely emerge in Longhorn and Microsoft's continued attempts to woo the media conglomerates spell out an ugly situation for anyone not on the Windows Media bandwagon.

Remember, Apple has to be able to get the media companies to sign the deals, and a completely consumer-screwing DRM is what they want. Microsoft will give it to them, and either Apple surrenders or goes along for the ride.

It's not if it will happen, but when.

Don't believe me? Ask IBM how much trouble Microsoft got into over OS/2.

obeygiant

Oct 13, 2004, 01:43 PM

i <3 apple

i'm glad they are enjoying 70% market share in something.

ioinc

Oct 13, 2004, 01:48 PM

Way to go Apple! Keep up the good work!

This is only good work if 70% is enough... and its not.
Apple has left the door open for someone else with more money and/or marketing power.

If apple had dropped prices and locked up the market with 90%+ market share... then I would say good job apple.

But this is just history repeating itself...

The for a long time in the 80's the Mac OS was the only real alternative. Apple kept prices high (and thus the market open to others) and eventually lost out to M$.

Same thing with the iPod/iTunes.

Wal Mart, or M$ or somebody will eventually come in and put some real clout behind one of these ventures and in 10 years we will all be talking about the great apple music player that has a whopping 3% market share (and complaining that we don't get enough 3rd party software gadgets).

Good job apple for opening up a market where others did not know one even existed.

Bad job apple for setting and leaving prices at a point where the masses were not happy.

Mr_Ed

Oct 13, 2004, 02:05 PM

CNet provides (http://news.com.com/Apple+whistles+a+happy+iTunes/2100-1041_3-5406671.html?tag=nefd.lede)This has been an area of criticism for 3rd party music stores such as Real Networks and the newly launched (http://cbs.marketwatch.com/news/story.asp?guid=%7BD5657B75-0B35-461F-9526-AEFAC1924F61%7D) MSN Music service.

Speaking of criticism, I just ran into this web site:
http://www.freedomofmusicchoice.org

They make some pretty good points there and it looks like an honest effort to inform consumers of the facts surrounding Apple's refusal to license their DRM technology.

Just kidding . . . . :D

jxyama

Oct 13, 2004, 02:10 PM

No, they don't, because the iPod is a hardware device that accesses the computer directly instead of acting totally on its own. All that Microsoft needs to do is make it as easy on anyone that wants to license WMA as they can, perhaps even going the route of getting everyone they can onboard for free and then "accidentally" breaking AAC on Windows. With their ridiculous bank account, they could then partner with a hardware provider and offer a buyback program for iPods with the promise that, if people will go with this other player, they get 40GB for half the cost of the iPod.

Meanwhile, Microsoft tells any tech publication that they'll pull advertising if they run stories on the iPod, offer extra money and support contracts if they'll promote the "alternative" device, and pursue the legislative route to slam through a bill with their increasingly pervasive lobbying so that all hardware players require vetting by the FCC. The new law could be something as simple as requiring some Microsoft "technology" that has to be licensed, and then not allowing Apple to touch it, no matter how much money is offered.

Anti-Trust? They've got the cash and legal clout to drag out a court battle long enough to kill the iPod, if they can even accomplish half of what I just spun out.

Actually, they could just price low until the market share drops enough and they get people locked in (like they have them with Office), then charge even more. Even if they didn't do that, the TCI/Palladium DRMed layers that will likely emerge in Longhorn and Microsoft's continued attempts to woo the media conglomerates spell out an ugly situation for anyone not on the Windows Media bandwagon.

Remember, Apple has to be able to get the media companies to sign the deals, and a completely consumer-screwing DRM is what they want. Microsoft will give it to them, and either Apple surrenders or goes along for the ride.

It's not if it will happen, but when.

Don't believe me? Ask IBM how much trouble Microsoft got into over OS/2.

everything you wrote will result in a lawsuit immediately. the idea they will get away with any of it is a bit out. there'll at least be an injunction to stop what they are doing. even M$ won't get away with such blatant re-abuse of the monopoly, when they've already been convicted once.

M$ can't really "break" AAC. it's in iTunes. to break AAC at an OS level would mean M$ must disable MPEG2 - DVD format. good luck selling such an OS. :rolleyes:

in any case, it's the hardware that makes all the difference, not the music distribution. you know why? because music player is where consumers have a genuine choice and also involve a lot more monetary committment. in the end, music is music. consumers don't care where they come from. no one will want an "inferior" mp3 player just so they can save 25 cents per song. mp3 players are what people actually use, hold and cherish - digital music is not tangible. trying to differentiate on digital music is useless.

M$ has to sell its management that beating iTMS will make money. they have a lot of cash - that doesn't mean they are willing to simply give them away to a cause that's unprofittable. xbox was made because console gaming is a lucrative market. similarly, even a company as big as M$ has to be convinced that there's money to be made in music distribution.

melgross

Oct 13, 2004, 02:37 PM

Apple is doing very well with this now, and has been since the beginning.

But there is something that I wonder about. Apple has had about 70% of the download market for a while now. This was when they had less than a third of the player market. Now they have over two thirds, and they still have about 70% of the downloads.

Does this mean that iPod buyers are downloading less music than before? I would think that as Apple cornered more of the player market, the sales from iTunes would not only go up, but would also show a greater percentage of the market as well.

This is something that Apple should be concerned about. One selling point that Apple has made to the music industry was that not only were so many people buying iPods, but each iPod owner bought much more music than the owners of the other players did. Figure this. One third of the market two thirds of the music sales vs. two thirds of the market (everyone else), one third of the music sales. Now Apple has over two thirds of the market, but still has a little over two thirds of the music sales. What's happening? Have the older buyers stopped buying music? Or is everyone buying less?

Jobs has said before that if Apple had to, they would either license Fairplay, or allow Windows Media files on the iPod. That point is not here.

The one thing that Apple has to watch out for in the player market, is that some other players are finally getting good reviews. Sometimes even better than the iPod itself. Check Consumer Reports this month, for example. We can't pooh pooh this sort of thing. As more players copy Apple's screen and menu, and make their players look more like Apples', the difference becomes less.

kornyboy

Oct 13, 2004, 02:41 PM

I think that the other online music stores are realizing that even if they release their own player there is no way to really catch up with what apple is doing with the iPod and its music store. That is why they are upset that apple won't let their stores support iPod intergration. They are just trying to figure out a way to "tread water" so they can't be blamed for trying.

desdomg

Oct 13, 2004, 02:43 PM

Apple is doing just fine. Great to see.

To those licensing gurus out there I would say that this is a non issue in the music DL market. That market is driven by the players and the player store integration - and Apple has the best on all counts.

Dont forget too that Apples iTMS was set up to compete with FREE P2P music on the net, so M$ price competition wont necessarily have an effect.

It is the whole package folks want, not the bits.

shamino

Oct 13, 2004, 03:06 PM

... perhaps even going the route of getting everyone they can onboard for free and then "accidentally" breaking AAC on Windows.
And how, in your imagination, is this even possible?

iTunes isn't using any Microsoft software to implement AAC support. It is using the QuickTime libraries - another Apple product. If Microsoft made a change to Windows such that QuickTime couldn't run, I guarantee you that Apple would have it patched and updated in less than a week.

In order for MS to modify windows so much that QT could never be made to work, they'd have to pretty much break every multimedia program ever written for the platform. MS may want to take over the iPod's market, but they'd not dumb enough to destroy their Windows installed base in the process.
Meanwhile, Microsoft tells any tech publication that they'll pull advertising if they run stories on the iPod, offer extra money and support contracts if they'll promote the "alternative" device...
This wouldn't surprise me. It's been done many times before.
...and pursue the legislative route to slam through a bill with their increasingly pervasive lobbying so that all hardware players require vetting by the FCC. The new law could be something as simple as requiring some Microsoft "technology" that has to be licensed, and then not allowing Apple to touch it, no matter how much money is offered.
I seriously doubt that they'd ever manage to do something like this. There have been prior attempts, which have failed miserably. Remember the "clipper" chip that the Clinton administration wanted to mandate as the only legal encryption device for the US?
...Remember, Apple has to be able to get the media companies to sign the deals, and a completely consumer-screwing DRM is what they want. Microsoft will give it to them, and either Apple surrenders or goes along for the ride.

It's not if it will happen, but when.

Don't believe me? Ask IBM how much trouble Microsoft got into over OS/2.
So what's your proposal? That Apple simply give up and cancel the iPod/iTMS now, because nobody can ever compete against Microsoft?

That's a pretty depressing idea, even from you.

coconn06

Oct 13, 2004, 03:09 PM

But this is just history repeating itself...

The for a long time in the 80's the Mac OS was the only real alternative. Apple kept prices high (and thus the market open to others) and eventually lost out to M$.

Same thing with the iPod/iTunes.

People always compare the iTunes/iPod situation with the Mac sitution in the 80's, but it's fundamentally different IMO.

The difference between the Mac platform and the IBM-compatible platform (which Windows ran on) was that the software - ALL software - was different for each platform.

That's not true in the case of iTunes/iPod. Sure, music purchased on iTunes or other stores is platform dependent, but the majority of digital music, MP3s, is compatible with all MP3 players and software. And even DRMed software can be circumvented by many methods, including burning to a CD and re-importing as MP3.

So this is a non-issue for most people right now. If the online music become a huge market and can somehow overcome illegal downloading, this will be more of an issue for Apple.

dontmakemehurtu

Oct 13, 2004, 03:13 PM

shamino

Oct 13, 2004, 03:21 PM

But there is something that I wonder about. Apple has had about 70% of the download market for a while now. This was when they had less than a third of the player market. Now they have over two thirds, and they still have about 70% of the downloads.
Minor correction. About 40% of the player market. The 82% figure that's been advertised is only counting players with hard drives.
Does this mean that iPod buyers are downloading less music than before? I would think that as Apple cornered more of the player market, the sales from iTunes would not only go up, but would also show a greater percentage of the market as well.
Well, we'd need to see the raw numbers to be sure, but I suspect that the number of people downloading music is remaining (more or less) constant and that most iPod buyers are using it with pre-existing music collections (mostly ripped from CDs or downloaded through other services.)

Given the current pricing atmosphere, download pricing (even iTMS's 99 cents) is very high. When I buy CDs from a record club (like BMG) I pay an average of $8 per disc (including shipping and taxes), which is between 40 and 80 cents per track (between 10 and 20 tracks per disc for typical albums.) When I can pay this price for physical media with uncompressed audio, 99 cents per track for compressed audio with no physical media just seems to expensive.

So you find people (myself included) using iTMS only for buying individual singles or tracks that are unavailable elsewhere, but going to more traditional sources when buying albums.
This is something that Apple should be concerned about. One selling point that Apple has made to the music industry was that not only were so many people buying iPods, but each iPod owner bought much more music than the owners of the other players did.
Buying a lot of music doesn't necessarily mean downloads. It also means buying physical CDs.
The one thing that Apple has to watch out for in the player market, is that some other players are finally getting good reviews. Sometimes even better than the iPod itself. Check Consumer Reports this month, for example. We can't pooh pooh this sort of thing. As more players copy Apple's screen and menu, and make their players look more like Apples', the difference becomes less.
Call me overly optimistic here, but I think one of the key points about the iPod is the wheel control. And that is patented (and I think it's fairly certain that there will be no licenses of this to other companies.)

As for Consumer Reports, I wouldn't put too much faith in them. They've been bashing Macs for many years. (I'll never forget one review where a PowerMac got marked down because it couldn't run the Windows version of MS Office. The article never mentioned that a Mac version exists and supports all the same documents.)

Arpan

Oct 13, 2004, 03:29 PM

Too many people think that since MS has so much more money than Apple, that they will eventually win.

What you are forgetting is that MS is moving in too many directions and is facing pressure from too many sides to put all its money into competing with Apple.

It's XBox division is losing money, MSN is barely making any, it has had to cut down on its hardware offering, it is having trouble with developing longhorn, losing customers and potential customers to Linux and a boat load of other problems.

Do you really think that MS is going to put all its money in competing with Apple?

Cheers
Arpan

Kirtus

Oct 13, 2004, 03:34 PM

zelmo

Oct 13, 2004, 03:36 PM

I think that the iPod has pretty much reached critical mass, to the point where Apple no longer needs to sustain the symbiotic iTMS/iPod relationship to maintain/drive iPod sales. I mean, M$ is getting into the game with all their financial weight, and here isd Apple making it's own island again. Now is the time for Apple to license FairPlay, let people in, and keep the momentum going.

Blue Velvet

Oct 13, 2004, 03:44 PM

I think that the iPod has pretty much reached critical mass, to the point where Apple no longer needs to sustain the symbiotic iTMS/iPod relationship to maintain/drive iPod sales...

Perhaps in the U.S.

But the UK & the EU are a year or two behind with these things.

In the last 6 months, I've seen a few more people with IPods/minis but that's London: a relatively well-off metropolitan area full of media/creative types.

General brand awareness is building up too. But by the sound of it, there's some catching up to do with the States.

God only knows what it's like in other parts of the world...

Lord Blackadder

Oct 13, 2004, 03:47 PM

Apple didn't single-handedly invent the hard drive-based MP3 player, but they did pretty much define and perfect it with the iPod. More than that, they integrated the hardware with a legal and reasonably priced method of obtaining, playing, burning etc. one's digital music.

The true test that Apple faces is how well their package of iPod, iTunes and iTMS holds up to competition. You have to look at them as a whole. Was it a good idea for Apple to restrict iTMS to Apple hardware? I think so, since it is designed to function together, but only time will tell.

Microsoft has many advantages over Apple that it can bring to bear if it truly wants to reduce Apple's presence in the market.

Oh, and, like someone said above, Consumer Reports is quite biased, I tend not to listen too hard to their reviews.

Java

Oct 13, 2004, 03:55 PM

i <3 apple

i'm glad they are enjoying 70% market share in something.

I second that.

melgross

Oct 13, 2004, 03:58 PM

In regards to the idea of moving the music from one format to another, we have to remember the problem of decreasing quality. AAC-CD-MP3 means recompression.

I haven't yet bought any music from iTunes, even though I have an iPod, because of the quality of the compression.

I know that it is perfectly fine for those who listen through ear buds, or computer speakers, or even the car audio system. What is is not prefectly fine for is listening through a fairly good home audio system. For a really good system, can be terrible.

Recompressing it to turn it into Mp3's makes it even worse.

I would like to see Apple have higher download quality. I would be willing to pay a dime more for 256k variable bit-rate encoding. As most of their costs have nothing to do with the cost of their storage or downloading, the extra dime would be at least half profit.
This would pull in most of those not satisfied with the current product. It would only require Apple to have two download buttons. High Quality, and Highest Quality.

Java

Oct 13, 2004, 04:01 PM

I'm totally behind Apple, but what would we be saying if Microsoft were in Apple's place right now? I'm sure someone would bellyache about a possible monopoly. I call dibs on the thimble.

I have to disagree here. There are plenty of other music stores out there online (what, last count 12?). Unlike Microsoft, Apple has a strong lead due to its innovative way of running the online store.

I think the iTMS is just a good product that everyone can easily use.

PlaceofDis

Oct 13, 2004, 04:02 PM

good stuff , what happend to the Beatles law suit ? was a deal struck ?

its going to court, both think they can win

melgross

Oct 13, 2004, 04:11 PM

Minor correction. About 40% of the player market. The 82% figure that's been advertised is only counting players with hard drives.
Well, we'd need to see the raw numbers to be sure, but I suspect that the number of people downloading music is remaining (more or less) constant and that most iPod buyers are using it with pre-existing music collections (mostly ripped from CDs or downloaded through other services.)

According to the NYTimes, Apple's share of the entire player market, including flash players is 62%.

Given the current pricing atmosphere, download pricing (even iTMS's 99 cents) is very high. When I buy CDs from a record club (like BMG) I pay an average of $8 per disc (including shipping and taxes), which is between 40 and 80 cents per track (between 10 and 20 tracks per disc for typical albums.) When I can pay this price for physical media with uncompressed audio, 99 cents per track for compressed audio with no physical media just seems to expensive.

I'm not talking about CD's etc. I'm comparing online downloads only. Those are the fiqures quoted by everyone, and are the only ones of concern.

So you find people (myself included) using iTMS only for buying individual singles or tracks that are unavailable elsewhere, but going to more traditional sources when buying albums.
Buying a lot of music doesn't necessarily mean downloads. It also means buying physical CDs.
Call me overly optimistic here, but I think one of the key points about the iPod is the wheel control. And that is patented (and I think it's fairly certain that there will be no licenses of this to other companies.)

Again CD sales have nothing to do with what we are talking about here. I buy CD's . I haven't bought a download. I just posted why.

As for Consumer Reports, I wouldn't put too much faith in them. They've been bashing Macs for many years. (I'll never forget one review where a PowerMac got marked down because it couldn't run the Windows version of MS Office. The article never mentioned that a Mac version exists and supports all the same documents.)

Consumer Reports is good for some things, and not good for others. They are very good for household goods, and autos, but not good for cameras, computers, and audio.

But you are missing the point. It doesn't matter what a few think about CU, it's what the masses think. And they think highly of it. CU was only an example. I'm finding good reviews of other players everywhere now.

It is a cause for concern. Don't live in fairyland and ignore facts. That's why Apple never made their market share go up.

And don't say that they didn't want to. They came to my user group many times over the years with planes how they would capture market share, but they never were able to follow through.

melgross

Oct 13, 2004, 04:17 PM

Sorry, I screwed up the quote, and my answers. My part is as follows:

According to the NYTimes, Apple's share of the entire player market, including flash players is 62%.

I'm not talking about CD's etc. I'm comparing online downloads only. Those are the fiqures quoted by everyone, and are the only ones of concern.

Again CD sales have nothing to do with what we are talking about here. I buy CD's . I haven't bought a download. I just posted why.

Kirtus

Oct 13, 2004, 04:24 PM

I
I would like to see Apple have higher download quality. I would be willing to pay a dime more for 256k variable bit-rate encoding. As most of their costs have nothing to do with the cost of their storage or downloading, the extra dime would be at least half profit.
This would pull in most of those not satisfied with the current product. It would only require Apple to have two download buttons. High Quality, and Highest Quality.

I don't know how much Apple has to pay for storage or badwidth but I would guess it would be more than a dime per song would cover after having to increase both by 200%. :o

thatwendigo

Oct 13, 2004, 04:28 PM

everything you wrote will result in a lawsuit immediately. the idea they will get away with any of it is a bit out. there'll at least be an injunction to stop what they are doing. even M$ won't get away with such blatant re-abuse of the monopoly, when they've already been convicted once.

I repeat that anyone who believes I'm being too extreme should ask IBM how it feels about OS/2 and the treatment it was given by Microsoft, who were active partners in its development and actually stood to gain money from its existence. Instead, they annihilated it through back-room manipulation and special deals they were uniquely positioned to make, cutting out any possible support for the newer operating system with economics, threats, and bribes of the more sinister kind.

What in the world makes you think that a government that's largely given a free pass to Enron, Worldcom, Unocal, and other corporate criminals - not least of which is Microsoft - in its tenure would chance its mind now, when there's all kinds of lucrative reasons not to. All it takes is enough bent politicians, and Microsoft has been pouring money into both of the major parties at all levels (local to the federal). They have contracts with the DoD and other government subsections, and they're promising the kind of control of media and information that would make the Patriot Act look like a passing breeze rather than the draconian measure that it is. Look, and I do mean look, into the truth of Trusted Computing (nee Palladium) and you can see an operating system that's two steps from putting DRM on anything that is created on hardware that runs it, with a system-level stamp of serial number and identity on all documents, transactions, communications, and other uses to which the machine might be put.

It's a selling point for major businesses, and has been ever since the idea was first floated as being truly possible. Meanwhile, Intel, AMD, IBM, Via, and the others responsible for chips and motherboard chipsets have signed on to provide the TCI framework. There is no shelter, there is no escape, and this is the future of computing if we don't start speaking out against it right now. Why? The same people who use Windows because it's what they know from the office will blithely walk right into this, too, and they'll bring the market with them.

Oh, but there's more...

M$ can't really "break" AAC. it's in iTunes. to break AAC at an OS level would mean M$ must disable MPEG2 - DVD format. good luck selling such an OS. :rolleyes:

You sound like you think it's unlikely they'd do that, when they're also maneuvering to make WMA/WMV and the Microsoft DRM solution - tied to Palladium - into the world standard for viewing any kind of entertainment. If you think that Fairplay is limiting, just wait until Microsoft gets some more of the media groups in its corner and really starts to leverage the format that will really, truly allow the companies to control how their media is experienced and used. It doesn't mean a thing to them that you won't be able to watch MPEG2, if you're dull enough to "buy" the media license they're going to start pushing once the new chipsets roll out and Longhorn/Palladium is pushed out the door.

The day is coming. Intel's announced TCI hardware in their mobile chipsets for Q2 2005, which will be required to use the newer Pentium M chips that are being released at the same time. Our supposed savior, IBM, is rolling out a desktop line with TCI built in as we discuss this.

How can Apple stand against it, if even the chip supplier we rely on (and Freescale, too, if you were thinking they were different) has signed onto the TCI group?

in any case, it's the hardware that makes all the difference, not the music distribution. you know why? because music player is where consumers have a genuine choice and also involve a lot more monetary committment.

People only have as much choice as the market gives them, and the manufacturers would be more than happy to jump on alongside Microsoft if there could be some guarantee of forced upgrades. With the measures in TCI in place, it would be ridiculously easy to just break a given format every few years and then require new purchases all around - OS, hardware, media, and anything else they wanted. This is something that OEMs and device manufacturers are keenly interested in, because we are rapidly reaching a point where the tradition of bloat and eye-candy can only push the hardware so far, and people feel more and more comfortable with slowing the pace of buying computers.

This way, the update cycle is mandated by the corporations, not the people.

M$ has to sell its management that beating iTMS will make money. they have a lot of cash - that doesn't mean they are willing to simply give them away to a cause that's unprofittable. xbox was made because console gaming is a lucrative market. similarly, even a company as big as M$ has to be convinced that there's money to be made in music distribution.

You're thinking small time. Microsoft is in it for the long haul and the big picture, and they want to own information distribution in general. Music is just a tiny - but lucrative - part of it.

And how, in your imagination, is this even possible?

iTunes isn't using any Microsoft software to implement AAC support. It is using the QuickTime libraries - another Apple product. If Microsoft made a change to Windows such that QuickTime couldn't run, I guarantee you that Apple would have it patched and updated in less than a week.

All it takes is undocumented shifts in the APIs, a few malicious bits of code here and there, and the application of the "signed code" aspect of Longhorn/Palladium to block out any application that Microsoft doesn't want to have running. The attack is two-pronged, and pretty clever. First, you get hardware manufacturers on your side as I just outlined above, and then you make all your products incompatible with the older hardware so that people who want to be able to use anything worthwhile and current (not to mention updated and security patched) will have to shell out. Once they've moved, you basically own them, thanks to the new system and its uniquely Microsoft-ish "security" model.

Who owns the "Trusted" servers? Here's a hint: It starts with an 'M' and ends in 'soft.'

Do you really trust Microsoft to tell you what you should and shouldn't be allowed to run on your computer?

I seriously doubt that they'd ever manage to do something like this. There have been prior attempts, which have failed miserably. Remember the "clipper" chip that the Clinton administration wanted to mandate as the only legal encryption device for the US?

You mean the Clipper Chip that was never defeated, right? (http://www.epic.org/crypto/clipper/)

In the style of Starship Troopers, I'll ask...

Would you like to know more? (http://www.cpsr.org/program/clipper/clipper.html)

So what's your proposal? That Apple simply give up and cancel the iPod/iTMS now, because nobody can ever compete against Microsoft?

That's a pretty depressing idea, even from you.

Good men, the last wave by, crying how bright
Their frail deeds might have danced in a green bay,
Rage, rage against the dying of the light.

Wild men who caught and sang the sun in flight,
And learn, too late, they grieved it on its way,
Do not go gentle into that good night.

SiliconAddict

Oct 13, 2004, 04:30 PM

to beat apple, M$ will need to first make an mp3 player that can beat iPod.

MS won't make the hardware. They will supply the store and possibly the OS. They will leave the hardware up to their OEM's and in the case of those OEM's they will prob go to foreign designers (example: HP went to HTC to design their iPaq's.) to create and manufacturer their devices. Remember that MSs' biggest strength is patients and an @$$ load of cash. It took 4 years but they are about to overtake Palm in sales on the Pocket PC front.

Blue Velvet

Oct 13, 2004, 04:34 PM

Remember that MSs' biggest strength is patients...

Is that what they're calling Windows users nowadays?

:)

SiliconAddict

Oct 13, 2004, 04:40 PM

Do you really think that MS is going to put all its money in competing with Apple?

Cheers
Arpan

Depends. Where does MS, or more accurately Gates, think profits are for MS in the future? If they see a future in consumer products they will go there and will take on Apple head on. If not they might play the same game they did with the Pocket PC. Longhorn is obviously bleeding money like a cow in a great white feeding frenzy but even then you do comprehend how much 4 billion in the bank will last them right? That isn't the money of a company that is going to go belly up anytime soon.

As for the Linux threat. Everyone keeps talking about that but I'm seeing no real materialization of Linux on the desktop. (And yes I'm aware there is a definite thrust into the heart of Windows land in the server side of things.) When I see a Linux movement as big as something like FireFox then I will be a believer. Until then smoke and mirrors. Smoke and mirrors.

SiliconAddict

Oct 13, 2004, 04:43 PM

Is that what they're calling Windows users nowadays?

:)

LOL! No. Those are called screaming lemmings. Screaming because some of us want to jump ship but can't. :p :(

Loge

Oct 13, 2004, 04:54 PM

MS won't make the hardware. They will supply the store and possibly the OS. They will leave the hardware up to their OEM's and in the case of those OEM's they will prob go to foreign designers (example: HP went to HTC to design their iPaq's.) to create and manufacturer their devices. Remember that MSs' biggest strength is patients and an @$$ load of cash. It took 4 years but they are about to overtake Palm in sales on the Pocket PC front.

Agreed MS should not be underestimated; but their success with Pocket PC is a lot to do with Palm being unable to get their act together recently; both in terms of the hardware and the Palm OS.

jxyama

Oct 13, 2004, 05:05 PM

You sound like you think it's unlikely they'd do that, when they're also maneuvering to make WMA/WMV and the Microsoft DRM solution - tied to Palladium - into the world standard for viewing any kind of entertainment. If you think that Fairplay is limiting, just wait until Microsoft gets some more of the media groups in its corner and really starts to leverage the format that will really, truly allow the companies to control how their media is experienced and used. It doesn't mean a thing to them that you won't be able to watch MPEG2, if you're dull enough to "buy" the media license they're going to start pushing once the new chipsets roll out and Longhorn/Palladium is pushed out the door.

[snip...]

You're thinking small time. Microsoft is in it for the long haul and the big picture, and they want to own information distribution in general. Music is just a tiny - but lucrative - part of it.

[snip...]

if windows would do something as ridiculous as disabling MPEG2 (DVD) playback, or any other "de facto" multimedia codecs, consumers will not stand up against it. windows isn't a choice for most right now because it does most things consumers expect it to and does it reasonably well. once M$ steps over the bounds of what's acceptable, consumers will switch to a better alternative. windows isn't popular because people feel some loyalty to it. as soon as people find out their windows PC can't play back DVD (because MPEG2 is disabled), dell support will be flooded with questions about why such is the case and a lot of angry customers will say no more windows.

same thing with music formats. M$ WMA can't also be "forced" upon people. there are always people ready to address the masses if what M$ offers become unsatisfactory.

lastly, M$ is mostly about leveraging their monopoly and financial strength to overtake existing and proven profitable market. such a company never have a "big picture" - their big picture is being innovated by other companies and they are just waiting to see if it becomes profittable. if any company is thinking "small time" by basically repeating "wait until profittable then take over" tactic, it's M$.

Fukui

Oct 13, 2004, 05:08 PM

I think that the iPod has pretty much reached critical mass, to the point where Apple no longer needs to sustain the symbiotic iTMS/iPod relationship to maintain/drive iPod sales.
I'm not so sure... once the market is at a huge huge level (in about 2 years if you beleive ANALists), and apple's market share has stayed the same or gone up and made BILLIONS off of this thing, I would exepect them to let the lock off of Fairplay.. but not until thier dominant market posion is pretty much guaranteed... its not now, so they are more conservative with licencing. I'd say in about 2 years expect apple to liberalize Fairplay.

ioinc

Oct 13, 2004, 05:17 PM

People always compare the iTunes/iPod situation with the Mac sitution in the 80's, but it's fundamentally different IMO.

The difference between the Mac platform and the IBM-compatible platform (which Windows ran on) was that the software - ALL software - was different for each platform.

That's not true in the case of iTunes/iPod. Sure, music purchased on iTunes or other stores is platform dependent, but the majority of digital music, MP3s, is compatible with all MP3 players and software. And even DRMed software can be circumvented by many methods, including burning to a CD and re-importing as MP3.

So this is a non-issue for most people right now. If the online music become a huge market and can somehow overcome illegal downloading, this will be more of an issue for Apple.

Fair enough.... so take the iTunes music store out of the equation.

now... if we limit the subject to just portable music players.... everything still holds true. (Perhaps more so since iTunes is much more than a music store, but also a very polished interface to manage your music collection)

If a large company comes out with a portable music player that is almost (but not quite) as good as the iPod but significantly less, then it will all be over for iPod dominance.

Epically if that company has a stronger marketing position (Read Wal Mart or M$)

melgross

Oct 13, 2004, 05:19 PM

I don't know how much Apple has to pay for storage or badwidth but I would guess it would be more than a dime per song would cover after having to increase both by 200%. :o

I don't agree. Apple charges $0.99. Out of that, they pay about $0.75 royalties and other fees. That leaves $0.24 cents left over for all of Apple's costs and profits.

This includes programmers, artists, and other staff to keep the site continually updated with new songs, books, freebie stuff, etc.

Legal costs involved with negotiations with artists, record labels, etc.

Rent on facilities. Taxes, fees, and other costs of doing business.

Costs of bandwidth, servers, cooling systems, etc.

It also includes a good deal for advertising, which has to pay for itself through sales of the iPod and iTunes.

After all of this (plus other miscellaneous expenses), Apple makes about a nickel per song.

Increasing the storage space will cost, but only a very small percentage of those total costs of $0.19. The same for the extra bandwidth, the costs are slight, and will be handily paid for with the extra charge. Remember Real, and MS already offer slightly higher bandwidth, at the same price.

ioinc

Oct 13, 2004, 05:25 PM

MS won't make the hardware. They will supply the store and possibly the OS. They will leave the hardware up to their OEM's and in the case of those OEM's they will prob go to foreign designers (example: HP went to HTC to design their iPaq's.) to create and manufacturer their devices. Remember that MSs' biggest strength is patients and an @$$ load of cash. It took 4 years but they are about to overtake Palm in sales on the Pocket PC front.

Why on earth do you think that MS won't make hardware?
Unless you are part of the MS executive team that makes such decisions and have some inside information... I think it is safe to say that M$ will make hardware if they think they can make a profit with it.

X-box is hardware.

Kirtus

Oct 13, 2004, 05:48 PM

I don't agree. Apple charges $0.99. Out of that, they pay about $0.75 royalties and other fees. That leaves $0.24 cents left over for all of Apple's costs and profits.

This includes programmers, artists, and other staff to keep the site continually updated with new songs, books, freebie stuff, etc.

Legal costs involved with negotiations with artists, record labels, etc.

Rent on facilities. Taxes, fees, and other costs of doing business.

Costs of bandwidth, servers, cooling systems, etc.

It also includes a good deal for advertising, which has to pay for itself through sales of the iPod and iTunes.

After all of this (plus other miscellaneous expenses), Apple makes about a nickel per song.

Increasing the storage space will cost, but only a very small percentage of those total costs of $0.19. The same for the extra bandwidth, the costs are slight, and will be handily paid for with the extra charge. Remember Real, and MS already offer slightly higher bandwidth, at the same price.

I just don't think they would get the volume to make your model work. Again no knowing the actual costs to add storage space or increase bandwidth, I can't speak real intelligently on this but I would guess that an increase of 200% would be cost prohibitive.

melgross

Oct 13, 2004, 06:19 PM

I just don't think they would get the volume to make your model work. Again no knowing the actual costs to add storage space or increase bandwidth, I can't speak real intelligently on this but I would guess that an increase of 200% would be cost prohibitive.

It wouldn't be that expensive. If you look at the figures you can see that. Just saying that it would be too expensive without some numbers to support your statement isn't helpful.

Storage is cheap, and so are servers. It takes about 4 Terabytes of storage to hold one million songs. One Xserve Raid holds up to 3.5 Terabytes for a little over $10,000. Assume that for speed and redundancy that Apple had as many as ten of these on site. That's about $100,000. If they also had ten Xserves, loaded, though not with three drives, just one, that would total about $60,000.

Add maybe $40,000 for ancillary equipment, and we have a nice round total of about $200,000. They won't need more staff for such a small amount of additional equipment.

A pretty small investment don't you think? Even if you doubled it, it would be small.

Bandwidth costs are, as I've said, fairly cheap these days, and Apple has plenty of it. They may not even need more.

This would hardly even impact their bottom line.

It would cost to re-incode all of that music, but they could do the new ones as they come on, and do the rest over a short time.

jxyama

Oct 13, 2004, 06:27 PM

melgross

Oct 13, 2004, 06:28 PM

And, I forgot to say, by the way what the profits are that would allow this.

Apple is selling about 4 million songs a week. If they make a nickle a song, as has been said, that's about $200,000 PROFIT a week. That would pay for the upgrade easily.

melgross

Oct 13, 2004, 06:41 PM

i just don't think there's much "market" for apple to bother offering two different versions. majority of the people who owns an iPod probably still rips their own CDs as mp3s because they don't know any better.

regardless, it's by design that the iTMS AAC is offered at such a (low) bitrate so that the conversion from AAC to CD to mp3 will degrade the song. this was part of the deal right at the beginning to satisfy RIAA's request that the songs sold won't easily be made into mp3s and that the resulting mp3s be inferior in quality. (and presumably, in RIAA's view, onto p2p.)

That's YOUR design. I doubt if Apple made the desision to encode at that rate so that Mp3's would sound bad. You might want to think that, but it's hardly tenable. They encoded it at that rate because MP3's have generally been encoded at that rate and people mostly think that's ok. Apple uses AAC, which has better quality at the same rate.

As people are used to counting how many songs would fit in a player based on that rate, Apple did it as a marketing move, so that people could compare directly without having to make in the head conversions. Remember that we used to think of an album as fitting in a 64k player. Thats why Apple did it.

And there is a market for a higher quality product. I know plenty of people who would pay a bit more for a much higher quality song. The difference between 128 and 256 variable, is astounding. For a small extra cost to them, Apple would be drawing in a fairly large number of people who have been staying out of that market. Plus, they could advertise that they have the highest quality music. Some artist have stated that they didn't like the quality of downloaded music, and so they were not going to do it until it improves.

jxyama

Oct 13, 2004, 07:03 PM

That's YOUR design.

no... when iTMS started, jobs alluded to this.

let me go look for the source of my claim. perhaps long time MR member can remember and chime in?

melgross

Oct 13, 2004, 07:27 PM

no... when iTMS started, jobs alluded to this.

let me go look for the source of my claim. perhaps long time MR member can remember and chime in?

I've been following this pretty closely, and I don't remember anything like that.

If someone does, please put the quote up here. Not just "I think I remember..."

I would think that MS and Real would have also had to agree to the same thing. Especially if the RIAA could show that Apple agreed, and as Apple is far and away the largest seller, they could then get MS and Real to agree.

But they don't encode at 128 and MS uses variable-rate as well. so how does that follow your argument?

thatwendigo

Oct 13, 2004, 09:23 PM

if windows would do something as ridiculous as disabling MPEG2 (DVD) playback, or any other "de facto" multimedia codecs, consumers will not stand up against it.

You're exactly right, even though I'm certain that you meant to say that consumers wouldn't stand for it.

If the dominant hardware platform and operating system were to align with the media conglomerates in a way that required everyone buy their media from their united front, then most people would just do so. There's no point in claiming otherwise, because it hasn't happened with any of Microsoft's other absues and assaults on fair use, intellectual property, copyrights, user's rights, and other concepts that people ought to be worried about. In addition, the current MPEG2 DVD format is about to go the way of VHS, making way for one of the competing HD-DVD standards.

Most people just don't care, and will do what they have to so that their favorite movie/music/show/whatever will play, and that's what Redmond is banking on. With emerging standards and a DRM operating system, the stage is set to start really, truly taking control of the media experience, just like they wanted to control the 'net.

windows isn't a choice for most right now because it does most things consumers expect it to and does it reasonably well. once M$ steps over the bounds of what's acceptable, consumers will switch to a better alternative. windows isn't popular because people feel some loyalty to it.

Ha!

So the tides of virii, trojans, security exploits, lost data, reinstalls, and other headaches that plague home users aren't enough, but you think a media codec will do it? All that Microsoft will have to do is require that you run signed media, which they'll negotiate with the companies that provide the content - and who WANT MORE CONTROL OF THE FORMAT.

For everyone but consumers and Microsoft's competitors, this is a win-win situation, because people will need new hardware and software, and the media companies can sell things to be played with them. They all make money, from the tiniest chipmaker involved in TCI all the way up to the owners of the distribution channels.

as soon as people find out their windows PC can't play back DVD (because MPEG2 is disabled), dell support will be flooded with questions about why such is the case and a lot of angry customers will say no more windows.

Because, you know, Dell support isn't already flooded with questions and people are leaving Windows in droves.

:rolleyes:

lastly, M$ is mostly about leveraging their monopoly and financial strength to overtake existing and proven profitable market. such a company never have a "big picture" - their big picture is being innovated by other companies and they are just waiting to see if it becomes profittable. if any company is thinking "small time" by basically repeating "wait until profittable then take over" tactic, it's M$.

Do a little research:
Palladium
TCI
DRM

Come back when you can tell me why those three are related, and how they don't play into Microsoft leveraging their monopoly. I mean, hell... You just made my point for me!

jxyama

Oct 13, 2004, 11:17 PM

Do a little research:
Palladium
TCI
DRM

and how successful has M$ been in implementing (rather, shoving down consumers throats) those? :rolleyes:

Windowlicker

Oct 14, 2004, 05:40 AM

good stuff , what happend to the Beatles law suit ? was a deal struck ?

yeah what happened? i had actually forgotten about the whole thing. they're probably still on court.. seems like these things go on like snails :P I guess Steve's Apple is gonna pay something to Paul's Apple. hopefully not.

ASP272

Oct 14, 2004, 08:05 AM

Windowlicker

Oct 14, 2004, 11:12 AM

Wow! I can't believe how paranoid everyone is. I have only been a Mac user for just over a year now. And I understand that you longtime Mac users have had some hard times in the past but could we have a little more positive energy here? Apple has a really good thing going here. They have a product that is introducing people all around the world to their computers. And every person who switches tells everyone they know about how great their new computer works. I know this because I do. Because of how wonderfull my emac/airport basestation/iPod work I have talked at least 3 people into switching to Apple products. I have also directed several more to the itms. This is good news! Could it be better? Yes. But this is good news. :)

I wish I had that easy time converting people to Mac. Everyone I know say "I don't like macs" and the reason is "because I don't know how to use them". Also, when I try to convince them it's not that different and it's very easy to learn, they just mumble. And the no viruses -thing doesn't work on them for some reason, even if I say it in a situation where this person has his/her computer stuck because of a virus. Oh, and then there's the price point. My friend recently told me she would be buying a computer and asked for my advice. She's not too experienced with computers and I told her she should get an eMac and that the price would be around 850€. At this point she was like "WOAH!" and the game was over.

WHY??? I't probably because of living here on the dark side of the world where the PCs are the better platform in every cases.

iMan

Oct 14, 2004, 12:00 PM

Apple can stay on top if they play their cards right. Lets be honest here guys. Until MS, Apple has had no competition. Napster and Music Match were and are a joke. This Fall and next Summer is going to be the first true test of how sustainable the iPod\iTunes powerhouse really is. Here's hoping Apple cleans the floor with Microsoft's butt.

You forget that still the downloadable music market is extremely small - compared to CD sales it accounts for only a minor percentage (like 2% or maybe less). It will change over time - and how many iPods are there out there by then? at 82% marketshare and rumors of even a Flash-player coming? Apple does not need to license its format before the download market is a major seller - and maybe never as long as they are better and equal/lower priced than competition. People today choose iPod for its total integration and style - and basically to play their existing music collection. A lot of people are wary of the DRMs of the online stores, and stays with CDs (or Kazaa) still - for that iPod is just fine.

Everyone is saying Apple should either open their iPods to WMA or license the DRM. The first then fouls up iTunes integration - most other stores would certainly not work through iTunes, adding complications to users - one of the big selling points. The other is meaningless for the same reason except if iTMS is going to be an inferior client. The two are tied in, and so is the user.

Apple just needs to make sure they have competetive players and a state of the art music store - then they'll stay on top. That said - such a task ain't necessary easy :)

iMan

Oct 14, 2004, 12:05 PM

Apple did the right thing when they put iTunes on Windows and made an iPod compatible with Personal Confusers. That's where their A+ game came into play. They probably don't sweat the MS Music Store in the least because of their integration already in place. Great forward thinking by Mr. Jobs!

Heh.. no sweat. They say MSN is a competitor, but hey - iPod is sporting 82% of the market for players, and then MSN and all the other stores are actually competing for the 18% remaining (and declining) part of the market (shows a bit in the 70% iTMS marketshare no?)

Good luck, I'd say :D

jxyama

Oct 14, 2004, 12:05 PM

deleted.

shamino

Oct 14, 2004, 12:15 PM

All it takes is undocumented shifts in the APIs, a few malicious bits of code here and there, and the application of the "signed code" aspect of Longhorn/Palladium to block out any application that Microsoft doesn't want to have running.
Do you seriously think that Microsoft is so all-powerful that there is no force that could ever prevent this?

Why don't we all just preemptively quit all our jobs and become personal slaves to Bill Gates then? Why don't we just sign over the entire government to them in advance?

Your incredible level of pessimism is staggering. If we were to believe you, then we might as well all commit suicide in order to avoid living through a Microsoft-created Hell-on-earth.

The only way you could be even less credible is if you said it was all at the request of saucer-people from outer space.
Do you really trust Microsoft to tell you what you should and shouldn't be allowed to run on your computer?
You seem to be saying that we already have no choice in the matter.
You mean the Clipper Chip that was never defeated, right? (http://www.epic.org/crypto/clipper/)

In the style of Starship Troopers, I'll ask...

Would you like to know more? (http://www.cpsr.org/program/clipper/clipper.html)
How do you "defeat" a chip? Congress votes on laws, not silicon.

So it exists. Maybe the government is even using it for their own communications. Who cares.

They're not forcing anybody else to use it. They're not prohibiting anybody from using anything else. (Those laws were never passed.)

Can you show me any example of a non-government corporation actually using this chip? Or do you think we should pass laws forbidding its use, just in case somebody might decide it has a useful application?

Your paranoia is staggering. Do you live in a dark closet wrapped in tin-foil? Maybe you should destroy your computer - after all, the aliens can read your thoughts through your USB ports.

shamino

Oct 14, 2004, 12:19 PM

I don't agree. Apple charges $0.99. Out of that, they pay about $0.75 royalties and other fees. That leaves $0.24 cents left over for all of Apple's costs and profits.
...
After all of this (plus other miscellaneous expenses), Apple makes about a nickel per song.
According to information from yesterday's quarterly report, iTMS makes about 3 cents profit per song. (Up from zero this time last year.) It is expected to rise over the next few years.

Jim_N_Tonik

Oct 14, 2004, 12:30 PM

[QUOTE=melgross] They encoded it at that rate because MP3's have generally been encoded at that rate and people mostly think that's ok. Apple uses AAC, which has better quality at the same rate.

I think this is the driving factor -- most people are more than happy with 128k files. It also means you can fit quite a few more on your iPod -- I believe this ties in with their 1000 songs number.

I'd love to see some numbers (I don't have any) - but I'm sure most people don't notice much difference at all between 128k and 256k encodings. From my personal experience I don't notice the difference unless I'm using equipment worth more than, say, $200 which is probably more than what most people are using on their pc speakers. (and I know the iPod is worth more than that, but the headphones aren't... )

shamino

Oct 14, 2004, 01:16 PM

They encoded it at that rate because MP3's have generally been encoded at that rate and people mostly think that's ok. Apple uses AAC, which has better quality at the same rate.
It's worth noting that before AAC and iTMS - when iTunes/iPod were primarily MP3 - Apple was assuming 160Kbps files for their iPod capacity estimates. They only started using 128Kbps for the estimates after they introduced AAC support.

thatwendigo

Oct 14, 2004, 01:24 PM

and how successful has M$ been in implementing (rather, shoving down consumers throats) those? :rolleyes:

Intel's Sonoma mobile chipset will have TCI built-in, and IBM's already toeing the line with one of their desktop sets. As for pushing the standard into consumer space, would you mind pointing out which of the following companies isn't a huge player in computing:

Microsoft
Sony
Sun
AMD
Intel
HP
IBM
ATI
Dell
Fujitsu
Hitachi
Infineon
Lexmark
Motorola
National Semiconducter
nVidia
Samsung
Sygate
Symantec
Texas Instruments
VeriSign
Via
Gateway
Toshiba
RSA

Here's a hint: They're all members of the Trusted Computing Alliance. Represented in that list, you have the vast majority of the processors, motherboard chipsets, architecture chips, graphics cards, security and encryption technology, and other major aspects of consumer computing.

Do you seriously think that Microsoft is so all-powerful that there is no force that could ever prevent this?

If you'd paid attention to what I said in the first place, I advocated trying to put a stop to this now, before it's too late and they really are too powerful to be halted. The United States government seems to have little to no interest in keeping Microsoft honest, and there is nothing but gain in supporting them for the media companies. The RIAA's clients have shown they have no regard for end users already, and respect only their botom line.

The kind of insane control TCI will allow is just what they want.

You seem to be saying that we already have no choice in the matter.
How do you "defeat" a chip? Congress votes on laws, not silicon.

"A society that would sacrifice a little essential liberty for a little security will have neither and deserve neither."

Your paranoia is staggering. Do you live in a dark closet wrapped in tin-foil? Maybe you should destroy your computer - after all, the aliens can read your thoughts through your USB ports.

Nice trolling. I think we're done here, since you can't respond without making ad hominem attacks.

shamino

Oct 14, 2004, 01:51 PM

Intel's Sonoma mobile chipset will have TCI built-in, and IBM's already toeing the line with one of their desktop sets. As for pushing the standard into consumer space, would you mind pointing out which of the following companies isn't a huge player in computing:

Microsoft
Sony
Sun
AMD
Intel
HP
IBM
ATI
Dell
Fujitsu
Hitachi
Infineon
Lexmark
Motorola
National Semiconducter
nVidia
Samsung
Sygate
Symantec
Texas Instruments
VeriSign
Via
Gateway
Toshiba
RSA

Here's a hint: They're all members of the Trusted Computing Alliance. Represented in that list, you have the vast majority of the processors, motherboard chipsets, architecture chips, graphics cards, security and encryption technology, and other major aspects of consumer computing.
These companies are members of every product consortium in existance. I would find it shocking if they weren't in TCA.

This means nothing.

Tell me, which ones have announced products with this feature? Anybody?

You may also remember other things like I2O, which was supposed to replace PCI slots and lock out open-source developers. People were all up in arms about it because all the big vendors participated in its development. And guess what? There hasn't been a single product shipped with it.

jxyama

Oct 14, 2004, 02:02 PM

my point wasn't who's taking part of TCI, etc. my point was there has not been a wide and successful (semi-forced) implementation of palladium/WMA+DRM/etc. such that the average consumers are inconvenienced. you know why? because as soon as vendors cross the certain line and decide that the consumers can be inconvenienced at the benefit of the interest groups, consumers won't take it. that's why i said it's been proposed, suggested, etc. but hasn't been successfully implemented - because you can't make people with money to pay for what they perceive to be imperfect.

name me a product with full palladium that's reached the mass consumers.

name me a product with WMA+DRM that's reached the mass consumers.

if palladium, etc. are ever to hit the masses, it will have to be done in a way to not overstep the boundary of what consumers feel acceptable. case in point: copy protected music CDs. look where that's going. consumers won't tolerate it because it's not acceptable to them.

the way you described the future of palladium, TCI, etc. is that the consumers will swallow whatever is shoved down their throat - i respectfully disagree.

thatwendigo

Oct 14, 2004, 04:02 PM

Intel's D865GRH reference motherboard (http://www.intel.com/design/motherbd/rh/)

Intel's PDF on LaGrande and TCI (http://www.intel.com/technology/security/downloads/LT_overview_fall_idf03.pdf)

Some highlights:
Requires new hardware that ranges from motherboard and processor down to specific keyboards, BIOS, and graphics cards. If this isn't a recipe for hardware vendors making ridiculous amounts of money on refreshing the purchase cycle, I'd love to hear what it is.

Also, see the widespread criticism of "signed code" approach, and how it's the vulnerability in XP currently.

IBM defends TCA and states that they offer products with the chips already. (http://www.research.ibm.com/gsal/tcpa/)

Tom's Hardware references the existing, manufactured chipsets: (http://www.tomshardware.com/hardnews/20040916_143806.html)

National's SafeKeeper family includes two parts, the PC8374T Desktop and PC8392T Notebook Trusted I/O devices, which are based on National's embedded 16-bit CompactRISC core technology. Both reside on the low-pin-count (LPC) bus, which sits at the intersection of input devices to the PC. Both chips are based on TCG's TPM 1.1b specification. The desktop chip is priced at $5 in 1,000-unit volumes, the notebook chip at $7.

CNet coverage: (http://news.com.com/2100-7355_3-5085442.html?tag=nefd_top)

Applauded in the paper are three features of the best-known trusted computing technology, Microsoft's Next-Generation Secure Computing Base, that may be positive ways of securing consumers' computers. However, the EFF criticized a fourth feature--known as remote attestation--as a threat that could lock people into certain applications, force unwanted software changes on them and prevent reverse engineering.

Remote attestation allows other organizations that "own" content on a person's computer to ascertain whether the data or software has been modified. Such technology could easily be at odds with a computer owner's interests, said Seth Schoen, staff technologist for the EFF and the primary author of the paper.

...

The companies have formed a new group, the Trusted Computing Group, to work on a single hardware design that will be supported by a number of software programs, including Microsoft's controversial security prototype.

More CNet: (http://news.com.com/Trust+or+treachery/2009-1001_3-964628.html?tag=nl)

Richard Stallman, founder of the Free Software Foundation and of the GNU project for creating free versions of key Unix programs, lampooned the technology in a recent column as "treacherous computing."

"Large media corporations, together with computer companies such as Microsoft and Intel, are planning to make your computer obey them instead of you," he wrote. "Proprietary programs have included malicious features before, but this plan would make it universal."

He and others, such as Cambridge University professor Ross Anderson, argue that the intention of so-called trusted computing is to block data from consumers and other PC users, not from attackers. The main goal of such technology, they say, is "digital-rights management," or the control of copyrighted content. Under today's laws, copyright owners maintain control over content even when it resides on someone else's PC--but many activists are challenging that authority.

Extremetech dissects an Intel Presentation: (http://www.extremetech.com/article2/0,1558,1274153,00.asp)

Looking at the above slide, you can see that CPU extensions were required to ensure domain separation, and to provide a secure space for the protected kernel and domain manager (DM) software. This means that the protected kernel and domain manager must be able to operate at a privilege level that is more privileged than Ring 0 in today's x86 CPUs. You may recall that many core OS services, kernel functions, and device drivers generally operate at Ring 0. Application software operates at Ring 3, and Rings 1 and 2 in x86 chips aren't really used much, though available if intermediate levels are desired. The problem in today's x86 architecture is that hacking programs can compromise Ring 0 security, and therefore a safer, restricted-access, unhackable (one hopes) protection level is required.

While Intel did not formally name this highest protection level yet, I saw a few references to "Ring -1" in a few foreign tech Web sites earlier this year, though they were simply concocting a logical name based on what little was disclosed about LaGrande at the time. It is supposed to be near impossible (though we know we might eat these words someday) for a hacker or errant application to set itself running at this highly privileged privilege level, or access other protected code residing and/or executing at that level. I'll soon describe how the trusted execution environment is set up based on Grawrock's class material.

...

Only USB mice and keyboards are covered by LT technology as protected input devices as defined today, not PS/2 mice and keyboards. Also, graphics adapters must be re-architected to support a secure channel from the system to the frame buffer. The ICH (I/O controller hub) has protected access to the TPM for reading and writing information. Finally, in order to be considered a LaGrande-compliant platform, the system must include an LT CPU, LT compatible chipset, and the new TPM version 1.2. The TPM v1.2 specification is not available yet, but to get familiar with the technology you can download the latest public TPM 1.1b spec. Note that the Trust Computing Group's TPM spec provides a superset of TPM capabilities required by LT.

jxyama

Oct 14, 2004, 04:12 PM

thanks for you research, but you still haven't gotten my point. none of those implementations pose much inconveniences for mass consumers. they aren't inconvenienced when their motherboards have restricted compatibility, etc.

what you suggested, like windows crippling media playbacks, etc. WILL cause major inconveniences to the masses. i'm saying those things will not stand.

thatwendigo

Oct 14, 2004, 10:40 PM

thanks for you research, but you still haven't gotten my point. none of those implementations pose much inconveniences for mass consumers. they aren't inconvenienced when their motherboards have restricted compatibility, etc.

If you're not inconvenienced by being required to replace everything in your computer or buying a new machine, then you've got a lot more money than I do. Apparently you missed the implication that Longhorn, TCI, and the DRM OS approach will require everyone to refresh their hardware in order to be allowed to use the next generation media.

what you suggested, like windows crippling media playbacks, etc. WILL cause major inconveniences to the masses. i'm saying those things will not stand.

Why?

I just showed you all kinds of things in support of my position, but you've yet to show a single shred of evidence that consumers "won't stand" for the alterations. Can you show me documentation of large numbers of people leaving Windows over things that Microsoft has done? How about the media companies actually losing money when they move to restrictive DRM and copy-protection?

jxyama

Oct 15, 2004, 04:40 AM

If you're not inconvenienced by being required to replace everything in your computer or buying a new machine, then you've got a lot more money than I do. Apparently you missed the implication that Longhorn, TCI, and the DRM OS approach will require everyone to refresh their hardware in order to be allowed to use the next generation media.

Why?

I just showed you all kinds of things in support of my position, but you've yet to show a single shred of evidence that consumers "won't stand" for the alterations. Can you show me documentation of large numbers of people leaving Windows over things that Microsoft has done? How about the media companies actually losing money when they move to restrictive DRM and copy-protection?

mass consumers buy computers that are already pre-built. people buying from dell are not going to notice that what they have is crippled.

i gave you an example. copy protected CDs - the ones you can't rip. and they were massively unpopular because they didn't meet the standard expectations of what CDs should be capable of. people complained and they are being pulled because people won't buy them. another example: DVDs that "expire" after a few playbacks. they went nowhere too because people didn't accept being made to "buy" something that "expires" against their will.

right now, multimedia playback on PCs is something mass consumers expect. if that's somehow crippled, people will complain and then leave. there's no documentation of large numbers of people leaving because manufacturers know they won't get away with it. M$ hasn't cripped windows to disallow playbacks because they know that just won't sell. there's no system with full implementation of palladium because M$ knows people will not stand.

you seem to think manufacturers exist in a void and can do whatever they want. i believe they can, but only to a certain degree, until they cross a certain line of mass consumer expectations (which i contend things such as multimedia playback crippling will do)

iMan

Oct 15, 2004, 06:15 AM

mass consumers buy computers that are already pre-built. people buying from dell are not going to notice that what they have is crippled.

i gave you an example. copy protected CDs - the ones you can't rip. and they were massively unpopular because they didn't meet the standard expectations of what CDs should be capable of. people complained and they are being pulled because people won't buy them. another example: DVDs that "expire" after a few playbacks. they went nowhere too because people didn't accept being made to "buy" something that "expires" against their will.

Right now a lot of people embraces online music stores - although not as popular as CDs people are far more positive to this approach than copyprotected CDs. But they essentially are the same thing - only the online music is even poorer quality.

I think the original comment was a bit in the paranoid area myself, but that said - the "threat" is actually quite real. It is important to differ between already existing products beeing hampered with and something "new". And there are a lot of ways to sneak this kind of thing in on the regular user without them even noticing it in the first place - so the danger lies actually in the fact that noone will ever know before it is already too late. For instance; there are a lot of reasons that Windows is #1 OS in the world - none of which are because it is the best, the most versatile or flexible one.

One interesting news this week is the google-harddisk search. Yahoo and Microsoft is planning something similar. I know this is on the paranoid side again - but how convenient to collect information like this... I am pretty much unplugging myself right away ;)

thatwendigo

Oct 15, 2004, 07:03 AM

One interesting news this week is the google-harddisk search. Yahoo and Microsoft is planning something similar. I know this is on the paranoid side again - but how convenient to collect information like this... I am pretty much unplugging myself right away ;)

Do a search for "software attestation" and see what it comes up with.

For the lazy, I'll summarize:

Under the TCI platform, there's a chip that sits between the processor and everything else called the Trusted Computing Module. It checks anything going in and out for status as authorized code, and includes a call-home feature if it detects something it's been programmed to think of as supicious. This can be media without DRM, programs that have been altered (cracks, anyone?), or anything else the manufacturers, vendors, and OEMs decide to put in.

But nobody will stand for it, right?

I guess that's why the Windows XP hardware registration was taken ou... Oh, wait. It wasn't.

jxyama

Oct 15, 2004, 08:33 AM

I think the original comment was a bit in the paranoid area myself, but that said - the "threat" is actually quite real. It is important to differ between already existing products beeing hampered with and something "new". And there are a lot of ways to sneak this kind of thing in on the regular user without them even noticing it in the first place - so the danger lies actually in the fact that noone will ever know before it is already too late. For instance; there are a lot of reasons that Windows is #1 OS in the world - none of which are because it is the best, the most versatile or flexible one.

good point, definitely can see that.

displaced

Oct 15, 2004, 08:48 AM

you seem to think manufacturers exist in a void and can do whatever they want. i believe they can, but only to a certain degree, until they cross a certain line of mass consumer expectations (which i contend things such as multimedia playback crippling will do)

Indeed.

Circa 2007, Dell advert: "New Dell Trustiplex TCI-50! Completely unable to play any of the 700 million songs sold on the iTunes Music store. Won't allow viewing of any DivX-encoded files. Unique new AutoFBI feature. Buy now, whilst stocks last!"

As long as there's an alternative -- either whitebox-builders offering TCI-free systems or other capable platforms (Apple, IBM non-x86 systems, etc) then those who implement TCI will be at a competitive disadvantage.

There's a staggering inertia in business also. If the new TCI'd Office suite won't run existing 'unsigned' stuff (e.g. the huge swarm of custom-built Access systems) then businesses aren't gonna rush to it. If the're facing having to re-engineer all their systems no matter what, I wouldn't be surprised if they choose something like Linux and F/OSS technologies. Because Microsoft aren't going to make this transition cheap, that's for sure.

MS can huff and puff all they want, but despite appearances, they do not control the x86 (IBM PC-AT-compatible) platform. They naturally have huge sway over what those machines run, but if there's demand for an alternative, there's absolutely zip that Microsoft can do to stop manufacturers making alternative hardware.

thatwendigo

Oct 15, 2004, 09:44 AM

As long as there's an alternative -- either whitebox-builders offering TCI-free systems or other capable platforms (Apple, IBM non-x86 systems, etc) then those who implement TCI will be at a competitive disadvantage.

You didn't pay much attention to what I pointed out before, did you? Intel and AMD are looking at ways to integrate TCI into their processors, while Via, ATI, Intel, and other chipset manufacturers are all onboard for working on making this thing a standard all across the market. There won't be a market for whitebox manufacturers top build non-TCI systems if there aren't any non-TCI parts made anymore, which is what Microsoft and the media companies want to see happen.

Also, this kind of thing is a guaranteed hardware lock-in for the OEMs, and it's the kind of thing that lets them dictate the upgrade cycle once more. It's out of consumer hands entirely if it happens.

There's a staggering inertia in business also. If the new TCI'd Office suite won't run existing 'unsigned' stuff (e.g. the huge swarm of custom-built Access systems) then businesses aren't gonna rush to it. If the're facing having to re-engineer all their systems no matter what, I wouldn't be surprised if they choose something like Linux and F/OSS technologies.

You're just not looking at this with enough cynicism:

1) The aim is to have all hardware run TCI, and to have all suppliers onboard for the "platform agnostic" measures that it will require. All major chip and motherboard chipset manufacturers are now in line with TCI, so that means Apple might have to play along just to keep from being left in the dust. In case you weren't reading my earlier comments, IBM and Motorola/Freescale are both members of the TCA, and IBM is a founding member that's been working on this kind of technology since 1999, not to mention being one of the first companies to offer a TCI-compliant machine (as of this year).

2) What will Linux run on, if all processors require signed code to even operate? How long can it keep up if new computers all have TCI Modules embedded, forcing anyone not on the standard to use outdated hardware? Also, could you name me a business that wouldn't love to have hardware-signed creation stamps on all documents, the knowledge that workers can't get unapproved applications or hardware in for entertainment or theft, or the ability to shut off data they don't want people to be able to access?

In a coporate IT environment, this is a wet dream.

MS can huff and puff all they want, but despite appearances, they do not control the x86 (IBM PC-AT-compatible) platform.

Would you say that, oh, IBM, Intel, AMD, Via, ATI, nVidia, Toshiba, Samsung, Dell, Motorola, Texas Instruments, National Semiconductor, Hewlett Packard, Sony, Sun, and Infineon "control the x86 platform?"

That's who's behind this, amongst other smaller players.

They naturally have huge sway over what those machines run, but if there's demand for an alternative, there's absolutely zip that Microsoft can do to stop manufacturers making alternative hardware.

Why in the world would they want to stand in the way? This is guaranteed money, if it's played right. It won't be a swift, single blow that makes people rebel, but the steady kind of chipping away that's allowing people's rights to be taken in exchange for "security" in the US. People are ignorant and stupid, and they'll accept that these measures make them safer.

Remember, you're talking about the population that puts up with roadblocks in DC and New York, the TIA, the Patriot Act, and other laughable "security" measures.

displaced

Oct 15, 2004, 09:57 AM

Fair enough -- given the total hardware lock-in, your scenario is likely.

However I'd be interested in your response to my comments regarding the reaction vendors are likely to get from their customers (without which, they do not exist).

Why would your average business re-develop their software to run on this? Bear in mind the quite archaic systems that are still working today. They're presenting a product to both business and personal customers that's fundamentally broken regarding the execution of today's systems.

I think hardware vendors are smarter than this. Why abandon 25 years of consistent development, compatibility (albeit with a few wrinkles) and a guaranteed market? I suspect that hardware vendors are not so enthralled to Microsoft as to subjugate themselves completely.

Is there anything from AMD/Intel/Transmeta/VIA that suggests that TCI-restricted systems will be the *only* choice? Or will it simply be the only choice for those wishing to take part in the latest step of Microsoft's game-plan? Because an increasing amount of the market is losing interest in Microsoft's vision.

thatwendigo

Oct 15, 2004, 10:19 AM

However I'd be interested in your response to my comments regarding the reaction vendors are likely to get from their customers (without which, they do not exist).

Why would your average business re-develop their software to run on this? Bear in mind the quite archaic systems that are still working today. They're presenting a product to both business and personal customers that's fundamentally broken regarding the execution of today's systems.

The steps are already being taken to get people accustomed to aspects of this system/platform, though. Stop for a minute and consider all the warnings that flew around the internet when Microsoft released SP2, especially for corporate customers that had programs broken by it. Add onto that the hardware scanning nature of Windows XP, and people still using it despite the hassle of doing so. Sprinkle liberally with DRM restrictions that limit your ability to use media you've duly purchased...

This isn't a mailed fist slamming into the face of a consumer. It's a gradual tightening of the thumbscrews so that there's no single, loud outcry, but rather an acceptance of the discomfort.

When it comes to businesses, though, there are distinct advantages to the TCI proposals and standards, if you have no trust in your employees and would rather rule by fiat. In a properly configured TCI system, no program will run that isn't vetted by the module that sits between the processor and the rest of the system. Your employees can only do things you approve of, and any deviation is watched over by the chip, logged, and reported. All documents are watermarked and encrypted with an ID that would be pretty hard to completely duplicate, given that it comes from the hardware components in the system that generates the content. Beyond that, it means that external hardware has that much harder a time being used - removable media, for example, would be more difficult to use in a theft.

This makes a lot of sense for corporations, and far less for consumers, unless you take the stance of the corporations. The "attestation" process can watch to see if you modify their content or software, and call home when it's detected. It can shut off your right to use a piece of information by revoking the "trusted" status from it.

Is it coming clear, now?

I think hardware vendors are smarter than this. Why abandon 25 years of consistent development, compatibility (albeit with a few wrinkles) and a guaranteed market? I suspect that hardware vendors are not so enthralled to Microsoft as to subjugate themselves completely.

With Palladium/TCI and the hardware lockdown, they have a more guaranteed market than ever before. All it takes is an occasional breakage in the formats to require Upgrade X to function, and then the companies that manufacture that part will rake in the cash. The update cycle is in their hands, not ours, if this happens.

Microsoft has long pushed the software side of this as much as possible, bloating their code to help OEMs sell new machines. Now they're just going to be blatant about it, and let the media companies in on the party.

Is there anything from AMD/Intel/Transmeta/VIA that suggests that TCI-restricted systems will be the *only* choice? Or will it simply be the only choice for those wishing to take part in the latest step of Microsoft's game-plan? Because an increasing amount of the market is losing interest in Microsoft's vision.

It's pretty tight-lipped whether there will be other options. Most of the chatter, when they get down to specifics, is how their next-generation chipsets and processors (by requireing the chipsets, if not embedding them) will be TCI-compliant.

Intel's Sonoma chipset for mobile applications is one example, since it's the only one they're talking about for the next Centrino campaign that they're aiming for Q1-Q2 of next year.

displaced

Oct 15, 2004, 10:55 AM

The steps are already being taken to get people accustomed to aspects of this system/platform, though. Stop for a minute and consider all the warnings that flew around the internet when Microsoft released SP2, especially for corporate customers that had programs broken by it. Add onto that the hardware scanning nature of Windows XP, and people still using it despite the hassle of doing so. Sprinkle liberally with DRM restrictions that limit your ability to use media you've duly purchased...

Hehe. SP2's problems are sadly yet another example of Microsoft's rather hap-hazard approach to coding a secure system. Funnily enough, the SP2-related problems we've seen with our systems find their root in the fact that SP2 manages to block Microsoft's own services (DCOM, COM+ RPC etc) from behaving how applications expect them to. We're rectifying this by using the MS-provided registry edits required to ease the stupidly-behaved firewalling. Nothing more nefarious than MS's own incompetence.

XP took an incredibly long time to penetrate business. Still, we prefer 2k systems to XP. Voluntary business upgrade purchases of XP are like gold-dust. The only reason it's here in our corp is that new machines come with it (thus 'activation' is a non-issue), and that our software only required extrememly minor changes (largely GUI related) to behave properly. A far, far cry from having to start coding our business systems from scratch for what would, essentially, be an entirely new platform.

Heck, we'd probably be more likely to switch to the Mac or IBM PPC-based Linux systems if we were faced with TCI/Palladium.

This isn't a mailed fist slamming into the face of a consumer. It's a gradual tightening of the thumbscrews so that there's no single, loud outcry, but rather an acceptance of the discomfort.

But the nature of what you're describing is that at some point, existing systems will simply no longer work. If the final result is any kind of half-way house, the entire idea is useless.

When it comes to businesses, though, there are distinct advantages to the TCI proposals and standards, if you have no trust in your employees and would rather rule by fiat. In a properly configured TCI system, no program will run that isn't vetted by the module that sits between the processor and the rest of the system. Your employees can only do things you approve of, and any deviation is watched over by the chip, logged, and reported. All documents are watermarked and encrypted with an ID that would be pretty hard to completely duplicate, given that it comes from the hardware components in the system that generates the content. Beyond that, it means that external hardware has that much harder a time being used - removable media, for example, would be more difficult to use in a theft.

Some of what you're describing is inter- and intra-business information exchange, where TCI would indeed seem to be useful. However, we already have systems like this in place, without crippling the utility of our systems, or re-implementing everything from scratch. PGP-signed email, MD5-summed binaries, etc. Best of all, these solutions are open for our partners to inspect also -- we don't have to blindly place our trust in a third-party (MS).

Much of what you describe is network administration. Very little of which is actually impossible today with existing systems -- especially those we use which are not Windows based. If I were to have to promote this to our board, I'd be scrabbling for genuine reasons.

This makes a lot of sense for corporations, and far less for consumers, unless you take the stance of the corporations. The "attestation" process can watch to see if you modify their content or software, and call home when it's detected. It can shut off your right to use a piece of information by revoking the "trusted" status from it.

Makes sense for content providers and software vendors. But again, this offers no benefit to organisations whose operations depend on their own in-house software. Not only that, but depend upon that software running properly on new machines. Why would we re-code our systems, into which tens or maybe hundreds of thousands of man-hours have been put, just to satisfy some requirement of some crippled hardware? Why would any of the hundreds of thousands of other companies in the same position, whose custom is the lifeblood of vendors such as Dell?

And if we're in such a position, where re-development was an absolute necessity for the business to continue, why would any of us choose such a restricted platform when there are alternatives (Apple, PPC-linux, or some other entrepreneurial vendor who chooses not to toe the MS line)?

Is it coming clear, now?

Well, the MS-sponsored hype for the project all sounds very nice for them. But if high-volume customers do not adopt, then alternatives will flourish.

With Palladium/TCI and the hardware lockdown, they have a more guaranteed market than ever before. All it takes is an occasional breakage in the formats to require Upgrade X to function, and then the companies that manufacture that part will rake in the cash. The update cycle is in their hands, not ours, if this happens.

The market will fracture, and I believe a sizeable portion will simply find Palladium/TCI unsuitable for their requirements.

Microsoft has long pushed the software side of this as much as possible, bloating their code to help OEMs sell new machines. Now they're just going to be blatant about it, and let the media companies in on the party.

But Windows (or at least the PC platform as we know it today) has, for all its faults, offered two excellent features: extremely versatile utility and long-term compatibility. What you propose completely eradicates the second advantage, and seriously hinders the first.

It's pretty tight-lipped whether there will be other options. Most of the chatter, when they get down to specifics, is how their next-generation chipsets and processors (by requireing the chipsets, if not embedding them) will be TCI-compliant.

I wouldn't be surprised in the slightest if this is simply h/w vendors hedging their bets. Companies make a lot of noise around these sorts of things.