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What do satellite dishes, DVRs and mobile phones have in common? (Pause) They all started out as consumer electronic products and have evolved into a service.When satellite dishes were 6′ in diameter and new, you’d see them in remote areas without normal TV-and the backyards of the wealthy. But they were hard to use -you had to get a schedule of what program was on what satellite when -and then aim your satellite at the appropriate bird and tune to the right frequency. In spite of the investment (and no or low cost access), as soon as satellite television became available as a service -with free dishes and tuners, home installation, and program guides -those 6′ dishes turned into rusting relics as the owners opted for a service as a solution.When DVRs were new (Replay and Tivo both launched at the same CES in (date)), the early adopters rushed out to get them -and were amazed at the convenience of random access to recorded programming with a list of named programs vs cryptic video tapes covered with scrawled names and illegible counter numbers. After misguided marketing that focused on”pausing live TV” (once you have a DVR, who watches live TV anyway), where are we today? More than 95% of all DVRs are”leased” from the service provider. Sure a $400 Tivo has some cool features, but not enough to trump the benefits of a leased DVR from the service provider.In the late 80′s and all thru the mid-90′s, mobile phones were bought at retail and then a service plan was committed. If you signed up for a year, they waived the”activation fee.” But who’s paid retail for a phone in the past decade? “Free phones” aren’t actually free -someone pays the full cost (just not the consumer). And smartphones don’t really sell for $199 -the carrier pays maybe $399 or more and then discounts them to the consumer.Why have these products turned into services? It’s about the convenience of getting a solution (the product AND the service bundled together) and the lure of”no money down”. Posted by Johanna Fry, on behalf of Ken Wirt, Vice President of Consumer Marketing, Cisco.

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