Robert X. Cringely writes:

It’s an expression made popular in Silicon Valley years ago by Andy Grove of Intel: “inflection point.” It’s that abrupt elbow in a graph of growth or decline when the new technology or paradigm truly kicks in, and suddenly there is no going back. From that moment, the new stuff takes off and the old stuff goes into rapid decline, whether it is a new standard of modem, a new video game, a new microprocessor family, or just a new idea. I think we’ve just hit such an inflection point and — though most of us still don’t realize it — the personal computer, video game, and electronic entertainment businesses will never be the same.

There are three pieces to this puzzle. First, as I noted last week, Bill Gates deliberately blabbed some details about the next xBox game system, which is to be officially announced this week. This gaffe, which I don’t believe was a gaffe at all, came for specific reasons that are still not clear, but the implications of Gates’ remarks ARE clear — that xBox 360 will perform many functions that currently require a home computer. Not only will xBox 360 play video games, it will play music and movies, surf the web and probably even offer a non-PC platform for voice-over-IP.

What message does this send to Microsoft’s hardware OEM customers that make home computers? What is Microsoft saying to Dell, HP, Gateway, and others? For all the customer bullying we saw proof of in the Department of Justice’s anti- trust case against Microsoft, one thing the kids in Redmond never did was propose to undercut their hardware OEMs by building a Microsoft PC. But now that’s precisely what Gates has proposed, and it is coming in time for this Christmas.

I don’t know why Microsoft would make this move at this time. Maybe the game business has become more important to them than home PCs, maybe some particular advantage over the PlayStation3 just has to be touted, Maybe Microsoft feels at a disadvantage to Apple’s upcoming movie service. Whatever the reason, there is no going back now: Microsoft is in direct competition with its own customers.

The second inflection point this week was made by Google with its Google Web Accelerator. The company has generally downplayed the Accelerator as simple research — a test that required a few thousand users. But it is much more than that. First, Google hasn’t yet announced a beta, and then changed its mind about what it’s beta testing. Every Google service that has begun as a beta turns eventually into an official extension of the Googleplex. Froogle, their comparison buying service, isn’t going away, nor are image and video search or GMail. The same goes for this Google Web Accelerator.

The application itself isn’t anything new. It is precisely like the Web Page Accelerator (WPA) application that was the key component of the old Starband satellite broadband service I used for awhile when I lived out in the wilds of Sonoma County. WPA was intended to overcome the inevitable latency of that 89,200 mile double round trip required to fetch any web page over the geosynchronous satellite connection. It did this by anticipating the user’s next page request and delivering that in advance in a compressed form. For every Starband (and DirecWay) user, there is a proxy session at the satellite downlink location utilizing more computing power than the Starband or DirecWay user probably has on the desktop being served.

The only differences between WPA and Google’s Accelerator is the lack of a satellite, and Google’s willingness to offer the service ultimately to any Internet user. This is an absolutely brilliant strategy — brilliant both because of the staggering technology effort it represents and brilliant because it promises — as does any inflection point — to change things forever.

Think about the scale of Google’s eventual effort here. With efficient caching, let’s say that Google can get away with devoting half the power of the average home computer to each active user. In the U.S. that’s 200 million users, though of course they aren’t all active at once. But there will be worst-case moments every week when a lot of them are active at once, so I’d plan for 60 million simultaneous users, which means 30 million desktop equivalents, which has to be vastly more than Google’s present 200,000+ servers offer. No wonder there has been all this talk about Google buying-up dark fiber. They are going to need it.

But why? Why spend all this money, make this heroic effort, just to make web surfing twice as fast? The first reason is because Google can do it. The company likes big stretches like this. The second reason is because everybody else CAN’T do it. The technology required is so breathtaking and audacious that even a Microsoft or IBM wouldn’t dare to try it and certainly Yahoo won’t. The best Yahoo can hope for is that Google fails, which they probably won’t. And the final reason for doing this is because it co-opts every ISP and web page owner. If surfing can be doubled in speed for nothing, of course nearly everyone will go for it. But that means every AOL customer becomes a de facto Google customer and this page becomes a de facto Google service that costs them nothing to produce.

The big question is where Google will go with this? Will they put ads on this page? Will they eventually put AOL and MSN and Earthlink out of business? Only Google knows. But what I DO know is that the Google Web Accelerator effectively turns every user into a thin client, whether they know it or not. Consider the obvious upshots of this. If Google adds power to its part of the Accelerator, you don’t have to add power to your end, meaning your old PC can last longer. Part of that has to come from Google assuming a larger role over time, taking responsibility for rendering Flash, for example. And they’ll do it. And we’ll let them. At some point, Google might even offer its own hardware device, optimized for the Accelerator. At that point, you’ll buy your PC from Google, use Google as your ISP, surf an Internet that is really the Google cache, be fed ads and sold content from Google servers. Its a GoogleWorld that requires no AOL, no Microsoft, no Intel, no HP or Dell — only Google, cable companies, telephone companies, users, and of course advertisers and web page producers.

There is no going back.

Inflection point number three comes from Apple, where it is finally becoming clear just how the company is about to remake the music and movie businesses.

But first a few words about Yahoo’s new $6.99 per month music subscription service. The most interesting aspect of this offering to me is the price — $6.99 per month — which has to reflect the actual cost of providing such a service. Yahoo can afford to do this for no profit, but they can’t afford to do it at a loss, so the difference between $6.99 and $14.99 shows just how much profit there probably is for Rhapsody and Napster — a LOT.

Yahoo is trying to do three things at once. It is trying to kill the iTunes pay-per-title pricing model, replacing it with the subscription model that has emerged as preferred by the record companies. And at $6.99 Yahoo’s move has to worry Apple. The second thing Yahoo is trying to do is to take out Rhapsody and Napster. Both other services probably will have to match Yahoo pricing, but neither has Yahoo’s deep pockets. Real, for one, has to be looking for a buyer and will probably find one in Microsoft. And finally, Yahoo is trying to position itself as the premier media company for the 21st century. If it works for music, movies, TV, and video games will follow and Yahoo will have turned its huge user base into a retail channel.

Maybe it will work, maybe not. It is audacious, to be sure.

Now to Apple. A Slashdot poster (it’s in this week’s links) purporting to be an Apple employee dropped a couple tidbits that fill-in the blanks for understanding Apple’s still unannounced movie download service. The man or woman said that Apple would be fudging somewhat its definition of High Definition video to save bandwidth and required processing power, starting instead of 720p-24 with half-HD and anamorphic 720-by 486 (look in the links for what anamorphic means). Apple may well offer those sub-HD versions of HD, but from the music videos they are already starting to offer in HD I think they’ll offer 720p and 1080i, too. Remember, the real market is download-and-play, not streaming.

The more interesting item in this Slashdot post, however, was the idea of Apple doing a video equivalent of its AirPort Express WiFi repeater that has audio output to link iTunes to your stereo system. This AirPort extension is the last piece needed for Apple’s video service and answers a lot of questions. Why doesn’t the Mac Mini have an optical audio port? Because the AirPort has one, instead. Why isn’t the Mac Mini more powerful? Because it doesn’t have to be. The Mini becomes a storage and downloading device and H.264 decoding is handled in the AirPort gizmo using one of the H.264 hardware decoder chips coming on the market for around $20.

So Apple takes over video and movies while Yahoo threatens with a low-priced music subscription service and Google threatens to take control of, well, everything.

And Microsoft? Microsoft kicks the dog.