Don't get me wrong, I really love Tivo.  The problem is they are about to become a what not to do case in the technology business world. 

To recap, Tivo is an industry pioneer that has changed how people watch television.  The problem is they've become so popular that the big guys (i.e. cable and satellite operators) are going after them in a big way. 

As you know, cable and satellite companies essentially own the pipes (or airwaves) into consumers' homes.  Historically, Tivo had a first mover advantage and really didn't need much distribution beyond retail (although their deal with DirecTV was an exception). However, that advantage has disappeared and the cable and satellite companies are coming out with their own Tivo-like options.

To compete, Tivo recently decided to give away free units to Comcast customers.  Great move for today, but not enough to thrive in the long-term. So what should Tivo have done?

I know hindsight is 20/20, but Tivo should have read some case studies on Apple or Palm, for example.  Apple and Palm had great hardware and software franchises and were first to market.  However, their leads were slowly chipped away (both times by Microsoft) as they were slow to license their software to the myriad of hardware players.   Tivo should have done the same.  By becoming more of a software play, Tivo would have given up the hardware business (lower margin), but made it up with a higher margin software stream.

I hope I'm proven wrong, but just a few weeks ago I tried the Time Warner version of Tivo.  The UI wasn't great, but it worked fine.  Plus, the cable and Tivo-like box were combined (like my DirecTV unit).  Good luck Tivo!