Like I said - you don't have to be a computer illiterate to use a Mac, but it helps. What resides in a PROM - say it with me - SOFTWARE! Compaq did not reverse engineer the PROM, they reverse engineered the BIOS which is software and not hardware as you claimed.
That PROM chip was, TA DA... hardware.
Just as a hard disk is hardware and software resides on the hardware so I guess you consider Photoshop to be hardware since it reside on - as you said: TA DA...hardware.
Like I said: you don't have to be a computer illiterate to use a Mac, but it helps.
HINT: a bios is software just as Photoshop is software. All software resided on some form of hardware (hard disk, PROM, system memory) but software never magically becomes hardware as you claim.
I think you're missing the point again as you did with warranties. You get a fact right (BIOS is software), but miss the larger picture. IBM had a lock on the hardware because of the BIOS. No matter how off-the-shelf the parts were, or how the BIOS was stored, they were useless as a PC without that BIOS.