My kids are doing their partto support the electronics industry this Christmas. Visions of semiconductors will dance in their heads in anticipation of whether they'll get all the portable wizardry on their wish lists: iPods, Game Boy DS, cell phones...
Pondering my budget for portable devices, each with its own specialized functions, got me thinking about the pace at which we are moving toward "converged devices," gadgets that can offer music, gaming, and communications in one package.
Certainly the pages of
reflect the momentum toward creating the one device that will do it all. But the reality is that hit products offer best-in-class single-use form and function. Winning products do one thing very well, offering electronics and ergonomics so "awesome" that the designs really define their respective market niches.
When it comes to portable music players, Apple's iPod reigns supreme. Apple is actually gaining market share, even as competitors like Sony chase after the iPod's runaway success. The NPD Group reports that the iPod accounts for 92.1% of the market for hard-drive-based music players, up from 82.2% a year ago.
Once you've got that kind of momentum, you can carefully consider what "convergent" features to add. Apple has stepped in that direction with iPod photo, integrating image storage and display. A mind-boggling 60 Gbytes of memory stores up to 15,000 songs or 25,000 photos. This is great news for those of us who grew up with albums and can't fathom buying music without the art and liner notes. "Album Art" downloaded from Apple's iTunes Music Store comes up on the unit's Now Playing screen.
In the world of portable game players, Nintendo's Game Boy series has a virtual monopoly. Nintendo's new DS gaming system is red hot, with 500,000 devices sold during its debut week in the U.S. in November. Nintendo also sold 800,000 Game Boy Advance and Advance SP units in the first week of holiday shopping for a combined 1.3 million Game Boys sold, setting a one-week sales record for handheld game systems. DS offers a host of cool new features, including touchscreen technology, voice recognition, and "PictoChat" for wirelessly sending sketches or handwritten notes. While DS also has stereo speakers for surroundsound, the audio is geared for the gaming experience, not for music or video.
Sony hopes to take a slice of Nintendo's portable game action by launching PlayStation Portable (PSP) this month in Japan. Sony is betting that convergence will be key to pulling some market share from Nintendo, as the PSP can play CD-quality music and DVD-quality video and display 3D game graphics via a custom processor unveiled last summer at Stanford's Hot Chips conference.
Still, launching such a "converged" unit is a risky market challenge. Look at Nokia's experience. The company may be the world's largest cellular handset maker, but it took its collective design eye off the ball when it focused on engineering the N-Gage game/
phone/video/music player last year.
Meanwhile, Motorola and Samsung took market share as Nokia struggled without a clamshell phone before finally introducing one last summer. Motorola has focused on higher-end products, succeeding with ultra-slim flip-phones like the Razr.
RINGTONES IN THE NEW YEAR
A phone's design has to be driven by its primary function--then, additional features can be considered. According to a study of U.S. cell-phone users from the NPD Group, tops on consumers' wish lists is longer battery life, caller ID, and a changeable ringtone. Downloading snippets of pop songs for ringtones has become a huge fad. Billboard now tracks the top ringtone downloads, and sales now top $300 million per year.
Still, consumers want convergent features as well. About 74% of Americans use a cell phone on a daily basis, and close to 9% of handsets in the U.S. have an integrated camera. Nearly 55% of the camera-phone owners pay to send pictures from their cell phones: One-third take pictures once a week, and 3% use the camera daily.
According to NPD, the most important add-on features for consumers considering buying a handset in the next 12 months are a built-in still camera, text messaging, and e-mail. Nearly 28% will look for Internet access or Web browsing capabilities, and 18% want a built-in PDA organizer.
So maybe 2005 will be the year of the convergent device. Of course by that time, my family will be equipped with this year's iPod, Game Boy DS, and phones. Replacing this year's design with next year's hot products seems to be what consumer electronics success is all about. Keep the sleigh full with those hot designs!