X
Business

iTunes phone is just more writing on the convergence wall

Although Motorola and Apple may disagree over when the time is right to show off a new product, there's clearly one thing they don't disagree on: convergence. "The first thing you're seeing here is a merger of two different industries with different ideas of launching products," said Motorola mobile phone chief Ron Garriques according to a Reuters report.
Written by David Berlind, Inactive
Although Motorola and Apple may disagree over when the time is right to show off a new product, there's clearly one thing they don't disagree on: convergence. "The first thing you're seeing here is a merger of two different industries with different ideas of launching products," said Motorola mobile phone chief Ron Garriques according to a Reuters report. Quite frankly, I'd like to know what else about the merger of those industries is keeping Garriques up at night. A lot -- way more than most people realize -- is at stake as this convergence becomes a reality.
For starters, the convergence is inevitable. As I blogged earlier this week (see Could IBM's Millipede mean the end of dedicated PDAs and MP3 players for good?), the barriers to such convergence at the device level (particularly the storage barriers) are disappearing faster than we can say "boo."
The convergence favors phone manufacturers that have both the experience in dealing with mass manufacturing volumes (versus the manufacturers of lower volume devices such as dedicated PDAs and MP3 players) and the connections (literally and figuratively) with the cellcos. In other words, it will be much easier for phone companies to incorporate PDA and MP3 functionality into their phone offerings than it will be for PDA and MP3 companies to turn their wares into phones. In terms of example manifestations in certain niches, the shift legitimizes Good Technology's software-only approach as the way to drive enterprise messaging into handsets versus Research in Motion's approach to make both the software and the handsets (the Blackberry). Long term, the expanded footprint and capabilities of converged devices will drive people who carry multiple devices to carrying just one -- a world that, as I said earlier, favors volume handset manufacturers like Motorola and Nokia.
But there are even bigger stakes at play. Motorola's partnership with Apple is interesting for a couple of reasons. The first of these is that, to the extent that Apple is licensing its technology to another hardware manufacturer, could Apple have finally found a way to tear a page out of the Microsoft playbook? Could Apple eventually sign enough partners that it has to reconsider selling hardware (iPods) that competes with its licenees' offerings? This will be interesting to watch.
The second reason is that, given the extraodinary power of the cell phone distribution channel (cellcos) to establish defacto standards -- over 180 million phones are in use in the US alone -- both the cell phone manufacturers and the carriers such as Sprint, Cingular, T-Mobile, and Verizon Wireless are in the position to make kings out of certain media platforms. Motorola's choice to partner with Apple over iTunes will undoubtedly help to drive the popularity of Apple's media platform. But the media platform war is just heating up and Apple's biggest competitor Microsoft isn't exactly standing on the sidelines. As I wrote in a column earlier this year, whereas Apple has that all important buzz (and an excellent product that's idiot proof when it comes to how well it works), Microsoft has the presence, the will, and the warchest to drive it's media platform into the market. Given it's mindshare with cellcos and handset manufacturers, it also has much more leverage in a converging market than does Apple. Yes, I can hear the Apple luddites now screaming "never count us out!" and I'm not, especially given the significance of the Apple/Moto deal.
But Microsoft is making headway, and sometimes in subtle fashion. For example, there was a recent deal between Microsoft and Verizon. Then, just two days ago, news crossed my transom from CTIA of how SmartVideo partnered with FOX Sports Interactive Media to launch a 24-hour sports channel that's specifically for smartphones. Though the announcement makes no mention of which wireless carriers will help drive the offering at their subscribers, it says "The service also can be integrated easily into any wireless carrier's current offerings." But near the bottom of the release was some text that demonstrates how Microsoft is having success at weaving itself into the fabric of the telecommunications infrastructure: "SmartVideo is a Microsoft Windows Media 9 Series Certified Hosting Provider." In response to my e-mail inquiry, SmartVideo spokespeople confirmed that "[SmartVideo uses] Windows Media streaming servers with SmartVideo's publishing points control systems."
To the untrained eyed, the battle for media platform supremacy looks like that's all there is to it: a bunch of formats like those of Apple, Microsoft, and Real (which seems to have the least going for it in terms of leverage) duking it out for the hearts and minds of end-users the way Word and Wordperfect or Excel and Lotus once duked things out. If you own a Mac or an iPod, you can play MP3s but why invest in the Apple platform if you don't really dig the integration with iTunes.
Editorial standards