I think the NYT article covering CES 2009, “To Connect to the Internet, Just Turn on Your TV,“ rightly points out that as hardware becomes more similar, software is going to be increasingly important for differentiation. I think it’s easiest to see in the cell phone industry.
The days of selling the smallEST & lightEST phones are over. Rarely do people pull out their iPhones to show off their form (like we all did when the first Razor came out). No, people with iPhones show off their coolest new application.
I think that the iPhone is already dependent on software to not only differentiate it from the rest of the utilitarian pieces of hardware circulating in the industry, but also to create a unified user experience. Being open source, the iPhone enables people to create & commune over personalized applications, which creates affinity for a piece of hardware, that not many other phones can boast.
It seems like the iPhone has got it right and Apple is ahead of other companies with their emphasis on cool apps, generated by them or us.
