By Lisa Johnston
New products on display at the American International Toy Fair, held in N
TWICE: As cellphones evolve into multipurpose devices, what will be the impact on sales of dedicated devices?
Laikin: I think multipurpose converged devices are the future of the wireless industry. With high-capacity memory cards on the rise and increasing memory size in the device itself, a converged device will be very capable of handling a variety of applications, features and functions.
A converged smart device is a minicomputer in the palm of your hands. Different operating systems (such as Symbian, Windows Mobile, Linux and others) allow multiple applications to run effectively on these devices. In the future, I believe consumers will have the capability of downloading the operating system of their choice and co-locating it with the operating system that came with the device. This would further increase the multifunctionality of a wireless device.
Misuraca: Dedicated devices will get faster and smarter, and sales will continue to grow.
Duea: The ubiquitous cellphone will soon become most people's MP3 player of choice. While research shows that consumers' digital music collections are growing, still 82 percent of online adults with music collections have less than 1,000 songs on their MP3 player. With 1GB MicroSD cards going for around $40, and 2GB cards readily available with even larger capacities just around the corner, a cellphone can easily handle the few hundred songs that are in the portable music collections of most consumers.
Moreover, many folks are searching for ways to eliminate multiple devices if they can find a device that combines functionality, particularly if the multifunction device is easy to use, affordably priced and doesn't require the user to make a sacrifice on quality. That is exactly the case with the new music-enabled cellphones. The new Cingular Sync from Samsung is a sleek, thin phone that gives consumers one-click access to music, allowing them to enjoy subscription music content from Napster on their phone as well as access Napster Mobile's 2.5 million song library directly from their phone. The Sync is aggressively priced at $49.99.
Finally, there is actually enhanced music functionality on the music phone so the consumer does not have to make a sacrifice of quality but instead gains enhanced functionality. That is in contrast to camera phones, which historically made consumers give up quality for the "always with you" convenience, causing many folks to own a dedicated camera in addition to their mobile camera phone.
The new music-enabled phones provide the same level of audio quality as dedicated devices but actually have superior capabilities with regard to Bluetooth 2.0 (wireless stereo headsets, wireless connectivity to car stereos), data broadband connectivity for directly accessing music from the phone, as well as high-quality color screens that can beautifully present album art.
Also, with the external memory card slots, these phones are upgradeable (32GB MicroSD cards are coming from Panasonic within two years). So the music-enabled phone is of better quality than most dedicated MP3 players and will become the main MP3 player for most consumers.
Cross: It really boils down to personal preference. While the music phone market is rapidly evolving and our products are widely recognized as solid "all-in-ones," we believe there will continue to be a healthy market for dedicated devices as well.
Sohn: We believe the impact will be minimal as you have the phone for everyday use of these functions and dedicated devices for when you want the optimal experience. The reason is that while phones can have high-quality functions across all areas, the most advanced features tend to start in dedicated devices and then move into cellphones.
Digital photography is a great example where phones are very popular for being able to take pictures wherever you go and at any time. Then, when the phone owner needs to have the best picture possible with the most advanced features possible, such as for a wedding, they turn to a dedicated camera.
Our challenge is to be the first and best cellphone provider to move the advanced feature from the dedicated device into the multifunction cellphone. The bottom line is that we are not simply improving the cellphone but creating the converged mobile device that we expect will be the center of consumer electronics for the foreseeable future.
Larry Smith, Archos: Consumers will always carry two devices, and dedicated entertainment devices, such as ours, will be the second device in their pockets. While cellphones continually add productivity and entertainment functionality, it's not practical — or even possible — to watch video on a 2-inch screen or build in a multi-GB-capacity drive in the small cellphone form factor.
There are three essential requirements for a true portable entertainment device: First, a large hard drive. A two-hour movie takes up about 2GB of storage, so several movies will take up space not practical on a cellphone. Second, a large screen. Enjoying a full-length film on a cell-sized screen also isn't practical. If you're talking about merging a phone and an MP3 player, there are good reasons and technology makes it possible. But a portable media devices require more than a cellphone can deliver.
Karen Rubin, Pioneer: The only impact that multifunctional devices incorporating navigation-type functionality (e.g. cellphones) will have on the portable navigation device segment is positive, in that they all contribute to overall category awareness. Through the increased advertising and promotion of GPS functionality by the cellphone carriers, the average consumer is now aware of what navigation and turn-by-turn is and the benefits.
The shortcoming of any non-dedicated device is that these products are originally designed for another primary purpose. Some of the top requests for navigation devices in any of our survey results include "maps that are easy to see and understand" and "clear and audible voice guidance," and cellphone applications of turn-by-turn fall short in that.
Sakuma: We believe there will be a market for both stand-alone MP3 players and for other devices with MP3 as a functionality. Not everyone will want a single device that does everything. I think the digital camera is a good example. Despite the fact that most new cellphones include the ability to snap photos, sales of digital cameras have never been stronger. The focus of a simple MP3 player is straightforward functionality and making it easy for the consumer to use. The cellphone is excellent territory for "feature creep."
This TWICE webinar, hosted by senior editor Alan Wolf, will take a look at what may be the hottest CE products at retail that will be sold during the all-important fourth quarter. Top technologies, market strategies and industry trends will be discussed with industry analysts and executives.