Convergence of the IT & CE Industries

Convergence of Digital devices
The topic of convergence have been around for decades. Forecasters have long predicted the coming of a digital age in which computing, communications, and entertainment. would converge into overlapping industries.

Convergence of CE and IT Industry

What we have yet to see is the full convergence of industries consisting of the  consumer electronics, computer hardware and software industry. This page explores the history and the current evolution of the the convergence of the modern digital media players and thus the coming convergence of Consumer electronics and the Computer hardware industry.

Convergence in Entertainment and The Digital home

In its simplest form, digital home entertainment convergence, means the overlapping of the primary entertainment functions of the computer, the music player, the television, the set top box and the game console. Taken literally the unification of functions could produce a massive reorganization of huge sums of revenue in a global business.

Convergence of the Compact Disc player and the digital music player
One transition  that  have already happened is Apple's successful Ipod music player and Itunes music store of  digital music that gives people the opportunity to take their digital music with them on the go and at the same time buy their music digitally over the Internet. The concept is somewhat different than before hand buying a CD in your record store and hearing it on your portable CD player. This usage model can easily be expanded to other media such as TV shows, Movies, Books, Newspaper and other media. This usage model refers to On the go, where consumer can take their media with them. The other usage models refers to in the home where consumers would like to record store and display their favorite media in timely fashion.
The Digital home industry players

A digital home includes all sorts of electronic devices—from the personal computer (PC) to the TV set-top box, the stereo, the game console and, in some versions, are connected, both to one another and to the internet. This makes it possible to transmit digital content automatically from peoples digital collections to electronic picture frames, screens and portable devices.

Parks Associates, a research firm in Texas that specialises in the digital home  surveyed a group of internet users and found that 84% of them use their PCs to store digital photos, 59% to store music, 36% for video clips and 26% for personal videos. 17% also store movies and TV shows.[1]

IT Hardware and OEM's

PC makers' message is simple. Their devices, with built-in Web connections, powerful computing capabilities, and software that encourages illegal copying, are better suited than traditional consumer-electronics gear from the likes of Sony, Samsung, Sharp. It's computers, not TVs, that will best serve consumers' growing digital desires, delivering everything from music to first-run movies, and shuffling that content to any corner of the home, they maintain. But it's not just the technology that could grab consumers tastes and wallets. For the first time, PC-industry companies are poised to deliver the element they've lacked for years: distinguishable content.[2]

IT hardware producers

IT producers have better at creating categories for i.e. Mp3 players, hard disk recorders, where functionality is high and easy to use, and more importantly at prices than consumers want to pay. Consumers seems to prefer to pay 199 or 299$ (see interview) than paying 2000$ for something they have difficulty to use or look at.

IT producers have been good to take out popular multimedia functionalities out of the Desktop computer and creating categories around them. An example is the DVD players for TV, the DVD recorders, and the mp3 players.

Lately we see players both mobile and stationary able to view videos and TV, for low prices.

Consumers are leading the drive for convergence

Why is convergence happening and who is behind the drive?  In today’s business environment of , Consumers are leading the drive for convergence. They are searching  for new ways in which to interact, today changes in the computer industry is not coming from the business area but from the home consumer. These consumers are the one that are asking for the latest and greatest, where business is sticking to trued and tried. The trend is seen in who is buying the most expensive computers. It is the gamers that play video games, the people who download and watch movies and listen to music. The whole computer industry is focusing their attention on the consumer instead of the business in search for profits. This these is therefore also mainly focused at the consumer and the home that relates to convergence.

The consumers possible  future usage models of the digital technology is leading the convergence in the devices.  The major new opportunity from convergence in the digital home and on the go, is that Consumers will have the option to watch their and use their favourite media such as movies, music, photos and games at anywhere and at anytime. This has not been possible beforehand.

Consumers would like to record watch and use their favorite movies, music, photos and games so as they can enjoy and share them anywhere at anytime. More specifically can this media usage be divided into the usage of these entertainment options on the go, and in the home. 

When Good enough is Great

Often though Consumers are not just asking for the product with the most options at the highest price. They are looking for convenience and affordability and products that get the job done.

Therefore It can pay to investigate and create products that are affordable and carry the basic needed functions a consumer device. Examples where consumers  are opting for cheaper and simpler devices are seen in i.e the Notebook vs netbook field, The Flip digital video recorder vs the Japanese Digital video recorders. The integrated cameras of mobile phone versus stadna lone high resolution digital cameras. The simple and easy Google apps, vs Outlook exchange and heavy costly web server applications. 

The Threat of Substitution
Companies producing Consumer electronics in the area of digital video entertainment are facing greater threats these years. The threat is that the path of industry evolution is being un-rooted in the traditional industry life cycle phase. They are under threat of being substituted by new products that cater to the same demand, but the products are coming from industries with different buyers, suppliers and complementors. Thus, the companies might be seeing that their industry current assets and activities are being threatened by the new approach.  This can change their industry evolution drastically, if they do not measure and control for these new possibilities in their strategy formulation.
Recent financial data from leading Consumer electronic companies show that the ability to generate de novo growth in new products categories have been failing in the recent years. On the the other hand leading IT and Software companies are showing strong growth and are diversifying and gaining additional revenue outside their normal business segments.