This has been something that has interested me for years and a subject about which I have written here and here in this blog.  As recently as five years ago, the topic of convergence was a speculative, hot one in media and technology circles.  The convergence discussed then was would there be convergence of the computer and the television?  Would people ever fully accept viewing television content on the computer?   Well we now have the answer to that loud and clear:  yes! Even Steven Jobs doubted this would happen.  He famously said that the profound difference between computers and televisions was that people leaned forward when interacting with computers and leaned back when watching television and that therefore this content convergence would not happen.  Well it did.

Now this convergence is combining with wireless connectivity to begin to change the connection of technology in the home.  The long predicted vision of technologists and futurists of the home of the future where everything is connected and can be monitored and controlled is now beginning.

Sony introduced plug-in adapters to allow some of its Bravia television sets to connect wirelessly to the ...]]> Last week the Internationale Funkausstellung was held in Berlin.  This is the largest consumer electronics convention in Europe, equaling and perhaps surpassing the CES show that occurs every January in Las Vegas.  One of the central themes behind major new product launches was the Internet and the central role it is now beginning to play in the wirelessly networked home.

This has been something that has interested me for years and a subject about which I have written here and here in this blog.  As recently as five years ago, the topic of convergence was a speculative, hot one in media and technology circles.  The convergence discussed then was would there be convergence of the computer and the television?  Would people ever fully accept viewing television content on the computer?   Well we now have the answer to that loud and clear:  yes! Even Steven Jobs doubted this would happen.  He famously said that the profound difference between computers and televisions was that people leaned forward when interacting with computers and leaned back when watching television and that therefore this content convergence would not happen.  Well it did.

Now this convergence is combining with wireless connectivity to begin to change the connection of technology in the home.  The long predicted vision of technologists and futurists of the home of the future where everything is connected and can be monitored and controlled is now beginning.

Sony introduced plug-in adapters to allow some of its Bravia television sets to connect wirelessly to the Internet.  Phillips introduced stereo systems that wirelessly tap into music stored on computers or laptops in the home and stream that music through out the home. Most of the flat panel TV manufacturers introduced models that connect to the Internet both with and without wires.

To those of us that keep abreast of technology and media, all this doesn’t seem too radical, just a logical next step.  We are in the early adoption phase of this new trend.  It is interesting to point out that it is our media orientation that is starting this development.  Our need, desire and sense of convenient right, to watch whatever we want, from whatever source we choose, is what is driving this early wireless connectivity within the home.  Internet video, television channels and stored digital music files can all now be wirelessly available in all parts of the home.

This will have seismic affect on the viewing of content.  Right now the television channels have the benefit of exclusivity in the living room.  We have all grown up watching television programs on the ever bigger screen in the living room.  Anything on the Internet must be watched on a computer screen.  Once there are more than 20% of households that have televisions sets connected with the Internet viewing patterns, and therefore audience ratings, will change.  The ever lower audiences of broadcast networks, and, to a lesser degree, cable networks, will fall even further.  Just think of being able to turn on your big flat screen TV set in the living room and watch YouTube, streaming video from any web site around the world and, of course that Internet favorite, pornography (and we thought pornographic web sites have big audiences today!).  An almost infinite number of web sites on the flat screen TV in any room of the house will further erode traditional television programming.

The combination of the Internet and high speed wireless connectivity continues the economic and institutional disintermediation that has been a regular theme here in this column.  This new home based development is now breaking down the barriers of appliance and technology silos. The TV is merging with the computer and the Internet, the computer is merging with the stereo system and it now possible, though yet demanded by consumers, for appliances such as the refrigerator, the home HVAC system and practically any other appliance to be wirelessly connected and monitored via the Internet.

We are now moving into that universally connected environment that was once only in the realm of science fiction.  When this new technological trend ultimately combines with the emerging touch and voice interface that will replace keyboards, the ease of use will be nothing short of amazing.  Imagine walking into your home and speaking to a wall monitor: “Please turn up the air conditioning, warm the oven to 450 degrees, put the Beatles on in the house sound system and search and download onto the flat screen TV any new videos from today on YouTube about  the presidential campaign.”.  However, in this new digital landscape there are still things that will remain analog such as walking upstairs and taking a shower, but of course the Beatles will be there to keep you company.

During the past ten years there has been great debate about the ebook.  Generally speaking there have been three points of view on the subject.  The first one comes from the true believers that the ebook is inevitable and that it would ultimately gain a noticeable and then sizable market share of publishing.  The second viewpoint is that while there would be a market for the ebook it would never really capture more than a marginal market share.  The third viewpoint was that the physical experience of reading an actual book is such an integral part of the reading experience that the ebook would never really catch on.  I am one of those that hold the first point of view.

In a column here last summer I wrote:

“e-books will ultimately gain significant market share.  This will occur when there is an ‘iPod moment’; when a device comes out that is low priced, wonderful to use and perceived to be cool or hip.  Once this occurs there will be a rapid increase in the percentage of books sold digitally, probably leveling off around 40 — 50% by 2025. Impulsive buys, such as at airport book stores will become “purchase, plug-in and download’. While those of us who have grown up with the wonderful tactile experience of ‘curling up with ...]]> Amazon’s introduction of the Kindle electronic book reader feels momentous. It is the first time that the long anticipated, much debated future of the ‘ebook’ feels ready to begin in a meaningful way.

During the past ten years there has been great debate about the ebook.  Generally speaking there have been three points of view on the subject.  The first one comes from the true believers that the ebook is inevitable and that it would ultimately gain a noticeable and then sizable market share of publishing.  The second viewpoint is that while there would be a market for the ebook it would never really capture more than a marginal market share.  The third viewpoint was that the physical experience of reading an actual book is such an integral part of the reading experience that the ebook would never really catch on.  I am one of those that hold the first point of view.

In a column here last summer I wrote:

“e-books will ultimately gain significant market share.  This will occur when there is an ‘iPod moment’; when a device comes out that is low priced, wonderful to use and perceived to be cool or hip.  Once this occurs there will be a rapid increase in the percentage of books sold digitally, probably leveling off around 40 — 50% by 2025. Impulsive buys, such as at airport book stores will become “purchase, plug-in and download’. While those of us who have grown up with the wonderful tactile experience of ‘curling up with a good book’ may intuitively resist e-books, the younger generations who have been in front of computer screens since early childhood will intuitively embrace e-books.  “What’s on your e-reader?” will replace “What’s on your iPod?” 

The Kindle may not be that low in price, and the verdict is yet to be rendered as to how wonderful it is to use, but it does feel like a game changer.  Let’s take a look at why it might actually begin the rapid growth of the ebook market.

Price:  At $399, the Kindle is not cheap.  What we all know of course is that all new technologies come to market at a price that ultimately drops, sometimes quickly. Electronic calculators, PCs, laptops, and cell phones are all devices that had initial high prices that dropped dramatically.  Early adapters buy at the first price.  Once the early adapter market gets saturated, scale economics begin to kick in and the price drops and more people buy.  If the technology is transformative, as all those mentioned above are, then the viral aspect of word of mouth fuels further growth.  At that point the market segments due to features.  Recall the brief history of the iPod, which also premiered at $399.  Now there is a model at that price but with ten times the storage capacity of the original model.  There is now a line extension, categorized by size and capacity that goes down to $79.  People buy the iPod that suites their needs.  In the case of the Kindle, the price will go down in general and then the market will segment.  Some will continue to pay the top price because instead of 200 books, they can have their entire library of 2,000 books on the player.  Other buyers will purchase a cheaper model that might only store 10 books at a time.  So, price is only a temporary impediment.

Selection:  The Kindle is a breakthrough in this area, offering 90,000 titles available for downloading.  Even the most recent eReader, the Sony Reader has only 20,000 titles available.  This is a key point, as it relates to perception of value along with purchase price.  If one enjoys a certain genre or an author that is not available, why buy the eReader?

Price of product:  The cost of an ebook for Kindle users is starting out at $9.99 for new titles.  That compares to a $20-30 price for the traditional hard cover version of the book.  That seems to be a good price value proposition.  In this regard, consumers have been conditioned by the digital transformation of music and video.

Wireless downloading:  This is the game changer.  Prior to the Kindle, all eReaders worked in conjunction with a computer which meant a location based two step process.  The Kindle allows a user to purchase and download a book via cellular technology in a minute. This means that one can buy a book anytime, anywhere.  It also means that someone with wide ranging interests will never be disappointed by limited selection.  Bookstores have physical limitations.  Think about the last time you were stuck in an airport and went to the book store to buy something to read.  The selection is usually limited to current best sellers or books whose publisher paid for shelf space. All books are at full price.  The Kindle allows the traveler to sit at the gate, browse an almost limitless selection of titles and purchase a book for the price of two magazines.

Name:  Kudos to Amazon for coming up with a name that does not have a small e or i in front of it.  The small i is now an Apple brand, and the small e always conveys that the product is the electronic step child of the offline or analog product.  In fact, we may stop using the word ebook and start using the phrase digital book.  

Business model:  The Kindle is the logical extension of the Amazon long tail business model.  We have all become accustomed to knowing that we can usually find any book we want at Amazon and find it from the convenience of our home or office.  However, even if shipping is free, there is a wait to receive the book.  Soon, Amazon will be able to deliver the product immediately to where we are with our Kindle.  Of course Amazon wins big if they can be the dominant purveyor of digital books.  It is a bold move by Amazon to expand their market dominance.  The publishers of course will ultimately weigh in on this.

So the Kindle feels to be the game changer in the long anticipated but yet to be realized world of digital books.  In the year 2015, when we look back at the history of the digital book market, there will be the generally accepted  view that the launch of the Kindle in November 2007 was the event that created the mass market.   

On this blog, and at conferences I point to the fact that it is the cell phone that is the true global technology. I have written about the explosive growth and sheer numbers of devices, of the technological innovation and how the cell phone has found a seat at the table of major media.  OHA takes the logical next step which is to break up the walled gardens of carriers and software suppliers.  Incompatibility is at odds with a world of  ever increasing connectedness.  Universality is one of the touch stones of our wireless future.  Another is the ongoing commoditization of the entire business pushing costs ever lower for the consumer.  OHA will facilitate both of these inevitable trends.

Google of course is doing this for business reasons.  They hope to dominate the mobile advertising marketplace the way they currently dominate the on-line one.  In addition, they seem to have a strong desire to attack the business constructs of Microsoft and other companies that sell ...]]> Google has now made the long awaited announcement that it would be entering the wireless arena.  It was not a product, or “Google Phone” roll-out, but rather the announcement of OHA, or the Open Handset Alliance.  OHA(my choice to come up with an acronym as the full name sounds a bit too bureaucratic and almost Orwellian for me to type it a lot) is the next step in the globalization of connectivity and something I have anticipated and expected for a couple of years.

On this blog, and at conferences I point to the fact that it is the cell phone that is the true global technology. I have written about the explosive growth and sheer numbers of devices, of the technological innovation and how the cell phone has found a seat at the table of major media.  OHA takes the logical next step which is to break up the walled gardens of carriers and software suppliers.  Incompatibility is at odds with a world of  ever increasing connectedness.  Universality is one of the touch stones of our wireless future.  Another is the ongoing commoditization of the entire business pushing costs ever lower for the consumer.  OHA will facilitate both of these inevitable trends.

Google of course is doing this for business reasons.  They hope to dominate the mobile advertising marketplace the way they currently dominate the on-line one.  In addition, they seem to have a strong desire to attack the business constructs of Microsoft and other companies that sell proprietary software to individual users.

Taking a look at the growth of the Internet provides some direction as to the growth of the wireless world.  Subscription models have largely failed.  People expect content to be free and easily accessible.  As a result, advertising supported content and services has won the day.  So, think about mobile devices.  If people don’t want to pay for video, news, entertainment and information on the web, why do the wireless companies and their content suppliers think that people will pay for content on their phones?  Purchased downloads is one thing, but all else will ultimately be expected to be free.  

Currently handset makers and carriers are trying to control what gets on the phone.  That walled garden approach will fail in the future.  Think again about the Internet.  What happened to that walled garden called AOL where people paid to be included?  When was the last time you bought a computer and were limited to the software that the computer manufacturer said you could have on your computer?  Open access for all will ultimately win out.  Once the handset manufacturers run through all the cool got to have features like a music player, high resolution camera, large touch screens and such bells and whistles the marketplace will move on to more computer oriented values.  These include storage capacity, speed of use, download speeds, ability to have multiple functions open at once and ability to connect real time with a friends’ network regardless of hardware.

Where this is going to get extremely interesting and transformative is when the market forces now launched by Google intersect with a couple of other extremely interesting developments.  The first is the 10 to 100 fold increase in chip speed that is now being developed by chip manufacturers.  This of course will affect all content and multi-task functionality on wireless devices.  The second is the coming increase in data storage technology.  It is expected that a breakthrough in storage architecture could increase storage capacity by at first 10 and then 100 times.  This means that instead of 200 hours of video that is the current capacity of an iPod today, there could soon be 2,000 hours, and then 20,000 hours.  Of course when this happens there will be ever decreasing reasons to lug around a laptop, or even use a computer at all.  Just have a wireless device and an external back up hard drive.  This of course will trigger the development of devices that are larger than current smart phones, but smaller than a notebook computer.

The development of this new form of large ‘smart phone’ or small notebook computer seems certain. When wireless devices have hundreds of gigabytes of storage and can be much faster than the current generation of notebooks, there will be no need for a sizeable percent of the population to have a computer.  Those that create content, be it documents or graphics will still need the interface with laptops and desktops, and of course businesses will continue their usage of computers as we know them today, but many millions more may not.  I predict that within years most people will carry two devices.  One will be this new mini-notebook or maxi-phone and the other will be a small phone.  The third hardware component will be a back up hard drive that will also serve to integrate all the screens and electronics at the home or office.

Another way to look at this development is that there are approximately four times as many cell phones at use in the world as computers.  The OHA open source wireless platform, exponential progress in storage miniaturization and capacity, and exponential increase in processing speed will all merge together resulting in a global wireless connectivity of billions of portable computers.  We are rapidly moving toward the day when 50% of the world’s population will be carrying around portable computers that can communicate with each other.  The effects, consequences and possibilities of that truly boggle the mind.