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The Convergence Device Movement

Posted on Tuesday, Apr 22nd 2008

Apple will be announcing earnings this week. Nokia announced last week, and their guidance was cautious.
Rim already announced an excellent quarter.

My sense is that all three companies will continue to do very well given the at large convergence device movement that is sweeping over our electronics-driven lives. Laptops will be abandoned in favor of these devices.

This, my friends, is the future behind which the iPhone has gathered momentum.

A quick look at the market shares tells an interesting story. RIM’s BlackBerry still retains 42% market share. Palm has 16% of the smart phone market, down 2 points from January. Palm has dropped sharply in the past year. In January 2007, it owned almost a third of the market. The iPhone is gaining ground, and according to InfoWorld, this is now a two-horse race:

“ChangeWave also regularly polls consumers to measure how happy they are with their current smart phones. There, too, Apple scored high, and well above RIM. More than three-fourths of iPhone owners — 79 percent — said they were ‘very satisfied’ with the device. RIM took second place with 54 percent, while LG (40 percent), Sanyo (40 percent), and Nokia (37 percent) rounded out the top five.”

Well, I am not sure about that. I still think Nokia and Samsung are forces to reckon with, and in the upcoming years, as the convergence device movement expands out of Apple and RIM’s comfort zone of the American elite, the game is going to change. In the emerging markets, especially, many consumers will be banking on the convergence device as their primary computer, and will bypass the PC altogether. It is the same thing that happened when, for example, Indian consumers bypassed landlines to jump directly to mobile telephony.

In other words, the above analysis of the market landscape is very American elite-centric, and does not reflect any understanding of emerging market dynamics. Remember, there’s a very real chance that the next billion computer users would be convergence device users.

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