As chips get cheaper, products get smarter. Sometimes they can get too smart for their own good. ... Until recently, the after-purchase use of a product has been crudely controlled via contracts, licensing or mechanical design, but now it can easily be controlled through chips and cryptography. ... At the level of bits, censorship and digital-rights management are technologically identical. What are the economic implications? The answer depends on how competitive the markets are. Manufacturers invest heavily in R&D ... but users are often better innovators. ... Digital-rights management can reduce innovation. ... [Audio remixes] will be simply impossible if DRM becomes commonplace. Too much control can be a bad thing, particularly when innovation is a critical source of competitive advantage. The stakes just got higher. In today's NYT, Berkeley professor Hal Varian (author of _Information Rules_) rails against Palladium in particular and DRM in general. Varian is a bellwether for the wider response among academia and corporate enterprise. I suspect he'll publish a similar, perhaps more quantitative rant in an upcoming issue of Harvard Business Review. And another in CACM, alongside Pamela Sameulson's rant. And an editorial in the Wall Street Journal. I'm calling it -- time of death, oh six hundred hours, 4 July 2002. Microsoft can afford to be wrong on this -- to them, it's just code. Pay the 'softies to spend their weekends at the office, and it keeps getting churned out. Plenty of cash flow to screw around for a few years under the protective umbrella of the Office suite. Intel and AMD can not afford to be wrong. At this point it takes many, many billions of dollars to set up a fab line for a new microprocessor. If they build it and no one comes, it will take them years to dig out of the hole. The IBM/Motorola/Apple team will not fail to capitalize on the situation. 'Palladium Sucks, Don't Buy It' | 
