Instead of installing specialized applications on general computers, software can be bundled with hardware to focus on a narrower purpose. Information appliances bundle and sell encapsulated software applications with dedicated hardware (Heer and Maher 1995).
Example Bundling an inexpensive and encapsulated computer with Web browsing and e-mail software (such as the IOpener) results in an appliance that is arguably easier to set up, administer, and use than the desktop computer but also less flexible. The personal digital assistant (PDA), such as the Palm or PocketPC, targets personal information management, and similar capabilities are increasingly bundled in the cellular phone. The game console (sold by Microsoft, Nintendo, and Sony) and the personal video recorder (sold by Microsoft, SonicBlue, and Tivo) provide personal entertainment. All these products are essentially specialized computers but unlike the desktop computer all except the PDA offer dedicated applications with limited provision to add other applications.
Information appliances exploit the decreasing cost of hardware to create devices that are more portable and ergonomic, and have enhanced usability. The usability point is the least clear, however, because information appliances also spawn multiple, inconsistent user interfaces, compounding the learning and training issues. Furthermore, they introduce a barrier to application composition, a capability offered by the desktop computer with considerable value through the indirect network effects it engenders. Partly as a result, the most successful appliances have been conceived and designed as an adjunct and complement to the computer, not as a replacement.
Example Most personal information manager, audio player, and digital camera appliances have a docking cradle or serial interface to the desktop computer. This allows information to be stored in the desktop for use by other applications and peripherals, while still allowing the portability and usability advantages of the appliance. Examples of information appliances not interoperable with desktops include digital television set-top boxes and personal video recorders; however, this may be an interim step because interesting options (like configuration and programming) could be accomplished by accessing these products through the Internet. Content suppliers may be opposed to Internet connection because of rights management issues (see section 8.1.5).
In this architecture, the computer essentially acts as a server to the appliances, which are its clients. A viable alternative is peer-to-peer networking of appliances, an approach that can also enable information sharing and application composition (see section 10.3) and may bypass one current limitation of appliances.
Historically, three phases of information product design, driven by the declining cost and increasing complexity of hardware, can be observed. First, the high cost of hardware dictates a single-use appliance, because the technology is barely able to meet the functional and performance requirements, and programmability would be infeasible or too expensive. In this phase, requirements tend to be satisfied with special-purpose hardware rather than through programmability.
Example Stand-alone word processors and programmable calculators were information appliances predating the personal computer that have largely been displaced by computer applications. The microprocessor was invented (by Ted Hoff of Intel) in the context of a calculator implementation that would allow more applications to share common hardware through the addition of programmability. However, this development depended on technological advances' outstripping the needs of the specific applications, leaving significant room for new forms of flexibility.
In the second phase, the hardware is sufficiently capable to allow cost-effective programmability, adding flexibility and allowing upgrades and new applications added after manufacture. Factors that make this approach attractive include the sharing of a single piece of (relatively expensive) equipment over multiple applications, the value of being able to add additional applications later, and the relatively easy composition of applications. In the third phase, the cost of hardware declines sufficiently to make the limited-purpose appliance affordable if portability and usability are sufficiently advantageous.
Looking forward, the declining cost and increasing performance of hardware implies that user decisions over the right mix of generality and specialization will be driven less by hardware cost considerations and more by considerations of functionality and usability. This is a happy situation for both the software industry and its customers.
Software in the appliance domain assumes characteristics closer to traditional industrial products. The software is more often bundled with the hardware at the time of manufacture, although later upgrades become possible if the appliance is networked. The embedded software is developed for a controlled platform and environment, with fewer configuration options and fewer challenges associated with expansion and peripherals. In most instances, maintenance and upgrade become steps within the appliance product development activity rather than a separable software-only process.
Since software is embedded at the time of manufacture, appliance manufacturers have traditionally viewed software as a cost of product development, not as a separate revenue opportunity. That is, they don't view themselves primarily as software suppliers and they view the software as a necessary price for market entry rather than as a separate revenue opportunity. In the future, as the software content becomes a greater source of value to users and consumes a larger share of development costs, appliance suppliers will view software as a separate revenue opportunity. This affects many things discussed previously, such as maintenance and support, pricing, versioning, and upgrades (see section 5.1). It also suggests a trend toward creating an open platform, one where other software suppliers are given an opportunity to add applications.
Example The dividing line between the information appliance and the personal computer is fuzzy. The Palm Pilot, although originally marketed primarily as a personal organizer, was from the start created as an open platform for other applications, and today has over 11,000 available applications (Palm 2002).