Each system starts out as a design group's idea of what the product should be. This is based on the decision about the overall product type. The development team discusses their ideas with various individuals and outside representatives to decide if the product mix is right. There's a lot of listening and learning about what's important and what's not, what's possible for a given price point, and what's not. The features and capabilities that the design group decides on go forward as a mockup.

The next step is to create a series of mockups of the unit out of foam, plastic or wood. The mockups are all a little different so that a user can compare and contrast the features and capabilities of the devices. After that is observation -- actually putting a user in a room with the prototypes and seeing which one she likes best and why. This may go through a couple of rounds while the product's case design and ergonomics are finalized.

While that's going on, the electrical designers are working on the design of the system board and support for the peripherals and ports that have been specified by the design group. The designers also choose the manufacturer of critical components: adapters, displays and keyboards of the new units as well. As part of this process, the components are designed to fit in the case form factor used in the mockups. Also, designers work with outside vendors on creating any specialized connectors or adapters needed to build the systems. All of these systems are not yet optimized. Early units tend to have Flash ROMs (Read Only Memories) for easy upgrades and are slower than the final units that will be produced.

While the hardware designs are being created, the software engineers are working on the drivers and applications that will be bundled with the device. The software people receive a copy of the whole system software release for the specific device they have chosen to create. Once they get this from Microsoft, then it's up to the OEM engineers to migrate that release to their hardware. This design process is done in emulation first and later moved to the first prototypes for testing.