Item 1) Below, Donna notes that a recent consultancy report rings the alarm bells about the use of open software platforms on cell phones (Dumb Mobs). If people have the opportunity to run the free services they want on their cellphones, they may be able to avoid paying for similar services. For example, dialing 411 costs money, doing a number lookup via one of dozens of websites is free. The point is, service providers have to lock down the hardware with DRM to make money on the service.
Item 2) Reuters reports that Sun's President and Chief Operating Officer Jonathan Schwartz predicts that hardware will be free in return for paying for a software subscription (Sun Rolls Out New Hardware, Software, Services). Slashdot readers respond (Sun Says Hardware Will Be Free). Actually, this is sort of how the cellphone market works today. Buy a service subscription and you get a free phone, but see item 1 above.
Indeed, the cellphone market model is already struggling and will only struggle more in the forseeable future. If this is the model Sun is adopting ... I'd sell Sun at this point.
The problem with the cellphone market is that it is desparately trying to evolve new functionality. Without neat new functionality I have to get, I'm not going to want to upgrade the hardware.
I buy the 1-year contract in exchange for the phone. If at the end of the year, I'm still happy with the hardware, I'm going to be able to push hard for a good deal on the service - especially with number portability. If the service providers can't tempt me with a new phone, I have significant bargaining power. If the phone is an open system my power is even greater.
One has to wonder how well this free hardware/subscription services model will work with the PC. Why would anyone want to subscribe for browser or word processing software? How much value will software upgrades through subscription provide for software that is pretty darn mature as is? The console market struggles with subsidies for things like XBox, but free is far more than a subsidy.
Item 3) Rumours are rampant in the Apple community that the next big thing from Apple will be a projector (Apple Projector - New Hardware for Apple Movie Store?). Now, I don't think the projector idea makes a whole lot of sense, but this line from the article caught my eye:
If the iPod was the trojan horse that allowed Apple to secure its place as the leader in DRM'd audio file formats, a movie projector that doubled as a computer could just as easily do the same for the company's computer install-base.
An almost throw away point, but an important one. Through DRM, Apple is attempting to garner control of the music distribution market. It isn't about protecting against piracy. It is only marginally about selling iPods. It is about controlling distribution.