I'm not entirely sure what your distinction is between hardware and 'product.' I would argue that 'product' as you argued for should be a meeting of hardware, software and UI/UX. Any one (or two) of these items on it's own pales in comparison to a healthy balance of all three.
From the VB article - "The truth is that if your company sells hardware today, your business model is essentially over". And you are comparing a complete product with only hardware / software.<p>I agree with you when you say "Its all about the product", and even the VB author does ("No one can make money selling hardware anymore. The only way to make money with hardware is to sell something else and get consumers to pay for the whole device and experience"). That term "experience" encapsulates a lot of what you talk about in your article.<p>Both, the VB author and you actually talk about the same thing. You somehow dont see it that way.
A definition of product I like is one where the product is more than the 'product'. By this I mean the product includes added value stuff, like sales experience, after sales and peripheral items (for example does the car come with mats).<p>Focusing on just the physical 'product' and not taking into account everything that fits into the above definition will leave customers with a poor overall experience.