Tuesday, June 15, 2004

Convergence --the dirty secret they aren't telling

Business week is running one of those warm fuzzy concept sales items they show a soft spot for every once in a while. This one happens to be on the topic of convergence. All your devices and functions intergrated into one another for maximum benefit...

Sounds like a pipe dream to me.

The real truth is this:

All in one devices generally suck more than the single function ones do. So why do we make multi-function devices if that is the case? Value adds, my friend. As the cost of technology drops, so do the potential profits. Volume helps for a while, but in the end things simply get cheap.

Not sure how this works? Look at the pocket calculator, digital watch, telephone, television, personal computer and the cd player for examples. Each of these devices started life as very expensive options. Nearly all of them can be had for a few dollars today. Notably, the DVD player fell down this curve quicker than most. The idea being the later you buy technology, the more you get.

Here is where the value add comes into play. If a CD player is worth $20 and a DVD player is also worth $20, then a combination unit should be worth more than $20 right? The dirty secret is a bit different however. The combination unit is worth more than $20, but it also costs more to make. Something must give to make the value add worthwhile. Usually it is quality or capability.

So now we know why combo devices suck more than single purpose ones, what else is there?

Convergence mixed in with content delivery spells lock in like no other. Can you say pay per use? The media giants smell money in the content side of things. Rather than release content in open standards and formats, they prefer to keep it locked in proprietary ones. This way, they can continue to resell the content to you as many times as you think you need it. Nice huh?

We pay plenty today, why pay more? What can be done?

Stick with well designed single use devices that make good use of open standards.

Take a hard look at potential solutions with an eye toward actually solving real problems. Getting music on your cell phone is not a problem, but moving your music you already own to a new device is.

Avoid subscription services. Work hard at owning your content the first time so you can make as many uses later as you want.


There are only so many dollars to go around. The media companies are trying to steal more share from other interests you may have. Cheap devices tied to potentially expensive services only increase your monthly burden. If you are forced to spend more because of the hardware you have, you will also spend less doing other, more important things.

Don't be a part of it. --Decide what you need, be conservative about it and buy smart thinking about the future. You will be glad you did.


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