Phone Business: The Age Of Convergence

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Quick, identify the company that produces phones, operates an army of servers that records your behavior and saves your music, movies and data files so that you may access them from anywhere on earth. Judging by the title of this magazine, you probably guessed Apple, but you could have just as easily answered Amazon or Google or Microsoft as well as a number of other competitors.

Description: Convergence

Now, ask a regular person on the street what Google does and there is a decent chance that he or she will properly identify Google as a search engine. That same person may tell you that Microsoft mostly makes operating systems. And is Amazon? An online is retailer. So how is it that they are now morphing into companies that are increasingly competing against one another across product and service sectors?

Perhaps it is appropriate that the Olympic Games are currently being held in London. The competition has never been fiercer in the technology realm and the biggest most successful companies are out to each other's lunch. All of their business lines are seemingly about to converge, if it hasn't happened already.

Microsoft is in the phone business, Apple makes online maps, and Amazon offers users gigabytes of free server space to store personal files. Why do they roll out these new features that their rivals perform, even if it isn't their core competency? Yes, because they can, but more importantly, because they have to.

Now you may have used a Blackberry but your children won't. The company is quickly on its way to becoming the modern-day provider of micro-fiche. Back in the day, every up-to-the-minute library had to have their collection of periodicals and newspapers on the format, care to recall the last time you asked your librarian for the microfiches version of a New York Times article?

Microfiche is an example of a technology that was leapfrogged and quickly went from being a viable media format to a history lesson. Blackberry too will soon populate business case studies as an endeavor that was dotted with strategic errors and for not properly reading the playing field. They did not expand upon their core base of offerings and soon found itself outgunned, out-cambered, out-styled, out OSed and out-maneuvered by the other more nimble mobile platform providers.

Description: Google, Microsoft, Apple, Amazon
Google, Microsoft, Apple, Amazon

The gargantuan lead that Blackberry held in particular markets, such as financial institutions, was painfully lost by a leadership that did not or cared not to make their products more like the ones that Apple, for one, produced. Could Blackberry have come out with a better interface more graphical in nature? Could they have offered better internet browsing capabilities? If they had, the company would have made handheld devices that behaved more like their competitors' offerings and in doing so, Blackberry may have been in the realm of relevance a bit longer. Alas, you will be able to tell your grandchildren fondly of a long-gone company that once put a trackball in the midst of their nubby keys. Children of the future will be delighted by the sheer bizarreness of the idea.

There are lots of missteps too when it comes to convergence. You may recall a trip to the local home appliance store in which you ran across refrigerators with built in monitors that allowed for surfing on the internet. Does anyone really need an internet enabled LCD on the door of their fridge? Well, the market says no, not at this point in human history. Those refrigerator manufacturers were wrong but their experiments shown a willingness to try whereas Blackkberry's lack of change showed a corporate culture of fear the fear of change.

The best success stories in which companies, services and products add new aspects to their offerings seem to come when the additions are evolutionary and not revolutionary in nature.

Apple started as a PC manufacturer and then added mobile music devices and then added a way of buying the music online. Then they added a phone, a new operating system and then libraries of applications. The additions to Apples corporate stable of offerings don't seem so radical in retrospect. Amazon, in contrast seems to have come to the same rough place but having taken a route seemingly opposite in order to that of Apple. Amazon started with online retailer and engineered their way to offering products that compete with the iPad. The Amazon phone is rumored to be coming out shortly.

The firms that will survive the coming culling will be the ones that are most nimble and can alter their strategies quickly and with proper awareness of their markets.

The age of convergence is upon us, and we are soon to be witness to the emergence of the umber category killers. Just the way Home Depot eliminated the need for so many mom and pop hardware stores; we are in the midst of tech companies creating super-services that will extinguish numerous current-day dinosaurs. Hope you have scorecard to keep track.

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