Apple’s Blockbuster product strategy is simple. Start with a new iPod that has video- and audio-out capability. This iPod — which will be just as good at playing songs as any iPod that preceded it – will be more than just a video storage device. It will be a video player. No make that plural – players – a whole family of video-out iPods, some with flash storage and others with little disk drives.
Take your Video-out iPod to Blockbuster, drop it in a kiosk dock then download from the local xServe your choice of 50,000 movies. You can rent the movie or buy it and you can even choose the resolution, which may or may not affect the final price. Take the iPod home, drop it in the dock attached to your TV and watch the movie. H.264 decoding takes place in the iPod in hardware.
For Apple the point here is to sell iPods to people who might not otherwise ever buy one (my Mom, for example), to bring digital downloads to people who don’t have broadband or even a computer, and to make it all incredibly easy. You don’t even have to return the videos when you are done, since they will automatically time-out. §
Hmm, that sounds interesting! Robert Cringely’s posts are usualy quite perceptive … and give you the "wowow" feeling after you read them. And he’s usually quite on target too. :)