Friday, November 09, 2007




13. So politics and economics are going to be significant here?

Exactly. The biggest profits in IT goods and services markets tend to go to companies that can establish platforms and control compatibility with them, so as to manage the markets in complementary products. A very topical example comes from computer printers. Since the Xerox N24 appeared in 1996, printer makers have been putting authentication chips in ink cartridges, so that printers can recognise third-party or refilled cartridges and refuse to work with them. Cartridge tying is now leading to trade conflict between the USA and Europe. In the USA, a court has granted Lexmark an injunction preventing the sale of cartridges with chips that interoperate with Lexmark's printers. Meanwhile, the European Commission has adopted a Directive on waste electrical and electronic equipment which will force member states to outlaw, by the end of 2007, the circumvention of EU recycling rules by companies who design products with chips to ensure that they cannot be recycled.

This is not just a printer issue. Some mobile phone vendors use embedded authentication chips to check that the phone battery is a genuine part rather than a clone. The Sony Playstation 2 uses similar authentication to ensure that memory cartridges were made by Sony rather than by a low-price competitor. The Microsoft Xbox is no different. But up until now, everyone who wanted to engage in product tying had to come up with his own hardware technology. This could be cheap for hardware product vendors, but was too expensive for most software companies.

TC will enable application software vendors to engage in product tying and similar business strategies to their hearts' content. As the application vendor will control the security policy server, he can dictate the terms under which anyone else's software will be able to interoperate with his own. In the old days, software innovation was fast and furious because there were millions of PCs out there, with data in formats that were understood. So if you thought up a cool new way to manipulate address books, you could write an app that would deal with the half-dozen formats common in PCs, PDAs and phones, and you were in business: you had millions of potential clients. In the future, the owners of these formats will be very strongly tempted to lock them down using TC (`for your privacy') and charge third parties rental to access them. This will be bad for innovation. It's possible because the app policy server enforces arbitrary rules about which other applications will be allowed to use the files a TC app creates.

... I guess the new amerikan concept of "free market" ...
... is to own any other country market for free ...


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# posted by intcoex : 1:40 AM




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