Bruno (hybrid8):
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...if I'm planning to differentiate my product, the best way to do that is through software. And you don't give that away i[f] you plan to make money. ...most [hardware] designs can be replicated quite easily. Now try duplicating the software. That's where we are with the empeg (and Rio's other products). The software, not the hardware, is just about the most valuable asset.

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Licensing their software IP is a worthwhile pursuit to make money. Open Source is suicide. However, there's no way they could become market leader by licensing software alone. This is a HARDWARE game.


No, it is a systems game. Products like the Rio or the Empeg are solutions or systems. How many of DNNAs licensors took only the software or only the hardware reference design? I don't know, but I'd bet it isn't a significant number.

Just as 99% of customers wouldn't buy a modern car with the on-board computer missing and wouldn't buy just the on-board computer - so the same applies to the DNNA products. The systems are pretty much interchangable. One car works pretty much the same way as the next - just like with digital audio products. It should be that features (price, performance, automatic windows, gapless playback) would determine the winner, but it actually comes down to ubiquity, visibility and who has the bigger marketing budget.

You also seem to have the impression that opening the source means that DNNA no longer owns it. DNNA still own the copyright and it is still intellectual property (in a similar way, patents are an important IP for many companies). The license grants others certain rights to examine and use the source code (but only providing they adhere to the license).

There are plenty of people on this BBS (and in Asia) would would find it trivial to take the Rio or Empeg binary and replace all references to "Rio" with "ABC" (or whatever), then ship a clone player. Perhaps some anonymous Asian company is doing that right now? Making copies of binaries is just as inexpensive as making copies of source.

By carefully choosing which license to use or even creating one of their own and carefully controlling which features are present in the open source version (and after what timeframe) many, if not all of the IP and licensor concerns could be addressed.

Trevor (tman):
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Is Apple a hardware or a software company?


I'd say that the desktop division behaves like Apple is a systems company. Virtually every other non-x86 computer manufacturer has shifted its business model away from non-x86 hardware or disappeared: SGI, Digital, Tandem, IBM, Compaq, RM.

HP have their printer cartridges business model as well as being x86 box-shifters.

The only other one I can think of is Sun - they seem to have survived so far because of their mix of software and hardware product lines. They are struggling and are moving more towards a services (professional ~, proactive ~, support ~) focus, just like IBM.

Apple iPod is interesting. I wonder what generates more profit right now: iPod sales or iTunes sales. I'd say that iPod+iTunes is a clear indication of Apple starting to move to a services business model, too.

We seem to have moved away from my original question a little, so to recap:

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So, it really comes down to a simple choice over priorities: revenue from direct sales or improved visibility, ubiquity and the opportunities those might bring.

DNNA seem to be loosing the ubiquity game at the moment. It may be that creating a licensing programme and opening the source to the player would be a far more effective way to win market share from Apple than spending money on TV adverts.


Would trying to increase brand visibility and market ubiquity by moving to a professional services & licensing business model and by using a carefully crafted open-source license be good for DNNA? Edit: and if so, when should they make the move - how long should they wait?


Edited by mdavey (05/01/2005 14:09)
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Michael
Ex-owner of stolen empeg #030102741