• Business Week, Tuesday, January 30, 2007 11 AM

Apple may be ticking the technology world off with its insistence on limiting the files played on its iPod, but it's taught its competitors that simplicity sells. Cool design helps, too, but Apple devices can be connected with relative ease, one of the main reasons for its success.

This is the lesson tech companies' are applying to their Web TV efforts. Companies like Sony, HP and others are creating software that can be used across devices like PCs, TV's, video-game consoles, handsets and DVD players. Connected software also makes it easier for third-party developers to develop products for a particular company.

Analysts say this is precisely what's needed for Internet TV to thrive. Microsoft estimates the market will be 70 million in just two years, up from 5.3 million this year. iSuppli projects 65 million. Companies like Comcast, Sony and AT&T will compete with Google, Microsoft, Apple and startups such as Brightcove and Joost. Convergence will ultimately lessen demand for some hardware products, like DVD players and eventually set-top boxes, but that's the nature of the beast.

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