Digital ConvergencePosted: April 29, 2010
At the core of the digital lifestyle is the promise of digital convergence. According to Harry Strasser, former CTO of Siemens, "digital convergence will substantially impact people’s lifestyle and work style". A digital lifestyle seamlessly flows through a multitude of platforms, such as mobile phones, gaming systems, television, digital radio, automobile infotainment platforms, PCs, net books, e-readers, tablets and a wide array of networked appliances and peripherals. Convergence is built on our digital identity and a ‘cloud’ of data associated with it. As we flow from device to device we expect different user experiences, but there should also be a degree of familiarity. All these devices are build on a variant of the same operating system (Windows OS, Chrome OS or Mac OS), which allows for a high degree of data sharing and integration.
In the mobile phone market the OS X iPhone was first to market with the universal user experience that spans all customer segments. This universality is also widely regarded as the trend towards consumerization of products. Since then a number of products have been introduced based on Google’s Android OS that meet the new minimum user experience requirement set by the iPhone. The successive introductions of Android and Google Chrome OS, have created some market confusion. Microsoft CEO Steve Ballmer accused Google of not being able to make up its mind. Google has downplayed this conflict, suggesting that the two operating systems address different markets, mobile and personal computing, which remain distinct despite the growing convergence of the devices. However, Co-founder Sergey Brin suggested that the two systems "will likely converge over time".
Palm’s (Garnet OS) and Nokia’s (Maemo and Moblin with Intel) ventures into Linux based operating systems lack what only Apple, Google and Microsoft (and maybe now HP) are able to bring to the game, which is the broader reach of a multiplatform OS family. Nokia’s Symbian upgrade is ultimately only a bridging strategy and it lacks the multiplatform reach that digital convergence demands. Nokia’s next generation N8, even though packed with everything under the sun, is already been judged by analysts as falling behind expectations, as it fails to bring anything new. Research in Motion hired Keith Pardy, as CMO, in 2009 with the mission of positioning BlackBerry as a universal user experience that spans all customer segments. What I am missing in the BlackBerry story is how they will address digital convergence and I bet we will hear within a year about a major partnership or move. I have been reading about announcements at WES 2010 and the BlackBerry Mobile Voice System 5 in partnership with Cisco is one play to watch. In addition to Cisco, IBM is still short a smart phone. I am torn about IBM, since they do not seem to be interested in the consumer play. Nokia is the one best positioned (historically) second tier player, yes I said it, to rise to the occasion on their own and deliver a holistic digital lifestyle, but Nokia’s ventures into PCs, net books and TVs have all been failures… yes, I said it. OVI is a far cry from Apple’s iTunes and hearing rumors about how much has been invested into OVI just breaks my heart. I am personally highly skeptical about rumors of a Nokia tablet and what success that product will have. Palm’s recent purchase by HP brings them back into the game… or more accurately brings HP into the game. HP has been a ‘wintel’ shop, but I would assume that Garnet OS will in the future grow up the food chain to cover tablets and net books. This is a game changer for Microsoft, as HP was supposed to be the major MS tablet play. Will Samsung get into the tablet game and has KIN shown the MS strategy in hardware partnering for mobile devices?
The market expectation is that Windows Phone 7 will bring Microsoft’s mobile product offerings past that minimum user experience marker (see preview of what is to come in the KIN), which will kick off a new phase in the brand wars. A lot has been talked about the super secret ‘pink’ project, but the rumor is that it is being built without either the Windows Mobile or Zune teams, as well as Premium Mobile Experiences head (and former MacBU leader) Roz Ho (see http://tinyurl.com/yfz4bxv). So go figure. When user experience reaches parity, the next level of differentiation is interoperability with other platforms associated with the digital lifestyle, as well as the ecosystem of partners that build value on top of the platforms. Interoperability is being driven by investments in middle ware, such as Silverlight and HTML 5.
The mobile application market is forecasted to reach $17.5 billion by 2012. From a developer community perspective, OS X and Android are seen as sexy new platforms to develop on, which have rapidly boosted their application offerings to level well past competition. Microsoft is generally known as a platform vendor and Microsoft ecosystem is next to none. A royalty fee for the OS is only a small base component in the overall ARPU potential of a user. ARPU can only be maximized through value added services and applications.
The mobile device market is often split into consumer and professional solutions. The reality of a digital lifestyle is that the two roles overlap and merge into a single role of ‘prosumer’. As prosumers we want both an iTunes with an endless array of entertainment options and BlackBerry’s portfolio of robust business applications. KIN is a side step from the prosumer path for Microsoft, but my long term bet is still on Microsoft.