Silicon Valley watcher Tom Foremski says to look for the evolution from open platforms such as the PC to more market-specialized hardware platforms that bundle hardware, software, and content. I'm not sure that Foremski is right that consumers will resist buying PCs with chip-based security and DRM. Despite the bad mouthing, iPods are doing just fine. And I'm not sure most consumers would know the difference. At least some of the ones who do know may want the increased security including better identity management that comes with chip-based security.
As described by Cnet's News.com, Xenon will be the first in a series of PC-like devices that are tied directly to games, music, movies and simple applications through mostly web-based services.
Microsoft said that Xenon would be more of a digital entertainment hub than the current Xbox. This would give it a ready platform for its DRM technology and for its MSN online network.
Microsoft has previously proposed inserting special chips into PCs, as part of its Palladium security scheme. But PC makers have balked at the extra cost and users won't like buying PCs with DRM technologies built in.