As makers of everything engage in an all-out features war to cram the most services, accessories, and functions into a single product, the real question for many is this: Does the consumer really want an all-in-one digital device?
A panel of industry players moderated by Harvard Business School professor Alan MacCormack took on the question of future "form factors" at the 2005 Cyberposium conference at HBS on January 29th. The general consensus: It's more important for users to be able to easily move digital information from one device to another than to have a single gizmo that is both a car wax and dessert topping.
At the moment, the cell phone is the closest thing we have to a fully converged device, said panelists, who represented device makers, telecom service providers, and operating system developers. Many cell phones feature a camera, instant messaging, Internet browsing, address and date book, and wireless e-mail. Oh, and you can also make phone calls on them. And video will be introduced on next-generation phones in the U.S. this year.
"The phone is the key device," said Mike Kelley, vice president of engineering for software developer PalmSource. People will count on their cell phone as the "hub" of their digital life, using it to access and collect information, entertainment, and other forms of data, which can then be spread to other devices as needed.
One For All?
That said, a single device is neither technically possible today nor desirable, several panelists ventured.
"In our lifetime we will not see a single device that will represent all devices for everything we do," said Rich Miner, vice president of Advanced Service Delivery for London-based telecom service provider Orange Services, U.S.
The barriers include human physiology (typing is still difficult on a small keyboard), technology (battery life for a fully converged device might be in minutes, not hours), and human preference (would the iPod be as popular if it looked like a cell phone?).
There will always be a need for specialized devices.
— Frank Tyneski, Research in Motion
"There will always be a need for specialized devices," argued Frank Tyneski, director of design integration at Research In Motion, maker of the popular Blackberry wireless communications handheld. Initially just used for wireless e-mail, recent Blackberry models have added phones and other functions. But no cameras, Tyneski said. RIM's primarily business users can't take cameras into many business and government sites.
The architecture of a device needs to represent the function, Tyneski continued, suggesting an all-in-one design will lead to mediocre features. "Do I want my business phone to play music?"
The key to living in a multiple-device life is a standard way of sharing information between devices, such as via data cards and network communication, said Susan K. DelBene, vice president of marketing, Mobile and Embedded Devices, at Microsoft.
Consumers have such varied needs, it's difficult to conceive of one product that would please them all. For example, DelBene added, she has certain device needs as a business executive and others when she is in "mom mode."
Slice And Dice
This wide variety of users from high school student to chief executive officer also makes it difficult for device makers to segment the market as cleanly as, say, PC companies are able to do, DelBene said. "Companies are spending a lot of time trying to figure out where the segments blur."
And people don't buy these devices just for the function, Miner said. "A lot of people buy phones today for fashion purposes," he said, noting that his own Motorola Razr phone, one of the hottest-selling on the market, is great on looks, but has a clunky user interface. "I want both," he said.
One interesting market segment is men versus women, said RIM's Tyneski. In user testing at RIM, participants are placed at a table that contains a Styrofoam phone and numerous Velcroed pieces that represent possible features. Asked to add the features they most want, women add very little—they prefer simple and easy-to-use, he said. Men, on the other hand, "attach everything on the table—we call them Frankenberries."
The watch industry might be a good analogy as to how devices will evolve, he said. For next to nothing, you can get a watch from Timex that contains all kinds of features. For $2,000, you get a watch from a high-end watchmaker that will do just one thing—tell time—but do it in style. "Features don't always get you there," Tyneski said.
Several panelists argued that the cell phone of today is not the ideal platform for innovation because the market is driven not by consumers, but rather by telecommunications carriers. It's the carriers who create design specifications for the manufacturers to meet, and services are largely tied into the carrier's proprietary network. "There are lots of things we'd like to put in" but can't, said Peter Wakim, director of Corporate Venturing for Nokia.
The result is reduced innovation, an emphasis on hardware solutions over software, and not much market pressure on pricing for services, several panel members agreed.
Miner, of Orange, foresees a trend toward standardized hardware, open operating systems, and open applications, events which should expose the phone market to more competition and provide opportunities for start-ups.
One of the biggest challenges, but also opportunities, is masking the complexity of converged devices with an easy-to-use interface, Tyneski said. The company that can own and control the user experience will have a leg up in an industry not known for customer loyalty.
"The user interface needs to be simple," agreed Nokia's Wakim. Or as Miner put it, "iPod simple."
Asked to identify opportunities for start-ups, panelists ticked off a better user interface, improved Web surfing, and RFID applications, such as the ability to hold your phone up against a product and download information about it.
Asked by an audience member about the threat viruses pose to cell phone networks, panelists agreed they are coming. "We are going to see viruses," Miner said. "Mobile phones (will be) a place that hackers want to attack."