I think this correct in that the USB drive was a poor seller and that Apple will likely not push it with ML, but I seem to recall Apple saying that Lion would be exclusive to the Mac App Store, too, before later having a USB thumb drive version available for sale.

I would imagine Apple Stores will have physical copies on hand for the Genius Bar. Not necessarily for retail distribution.

Good. Nice to see Apple is the only one that has the balls to push forward against physical media. Everyone else will follow-suit eventually, but they'll straddle the line and be risk-averse until Apple has made it mainstream, like pretty much every single innovation.

If anyone needs to save ML on physical media after download, I'm sure it will be just as easy as doing so with Lion. Non-issue.

So how do I update the 10 users in my office? Download it 10 times? (We're still on Snow Leopard.)

As long as they still provide a .dmg that we can restore to another partition / external drive / pen drive / you name it, I'm totally fine with that.

Quite frankly, media is a mess. Installing Lion from a backup DVD proved useless last time I tried, simply because the drive kept seeking... took HOURS to do it. Then I lost my patience, restored the .dmg to an USB drive I have and there we go, smooth restore. Yeah, loosing a HD is not fun.

BUT, if they only offer it through "Network Install" then that is bad. REALLY bad... I hope they won't be that stupid.

I support this move on Apple's part, but only if they do two additional things:
Provide an easy way to download ML and burn to optical media / convert to USB installation Provide firmware updates for their hardware running Windows as well
As "future-thinking" as this is, it makes computer OS reinstallation and triage a pain in the ass--and the fact that you need OS X to get OS X is a massive oversight.

What if I don't have OS X? What if my version of OS X is completely damaged and I can't use it?

Virus, user negligence and hard disk failure are all real-world scenarios.

I think it was the last event Jobs spoke that he said the Mac was "just another device." I could see Apple changing the accounting for Macs that would make yearly updates free of charge. This could end up being more profitable for Apple as it could... Increase Mac ownership since free yearly OS updates would be considered value added.

Lower the cost of the support since more users would be getting the latest OS updates since no cost is being applied.

Eventually shorten the timeframe in which older Macs are supported to something more akin to the 3 years for iOS-based devices instead of going back 5 to 6 years for most machines.