Convergence and Competition

Convergence of communications technologies and how it will upset "monopolies" (imagined and otherwise) has been moving forward for some time. According to the WSJ story (below), it is about to take off. I believe it. I also have no clue how it will unfold but the unpredictability of it all is the hallmark of the process. There will be many bets placed and some of them will be good ones.

"A New Tech Battle for the Home
As Industries Collide and Gadgets Morph,Competition Reigns for Home Technology"

By DON CLARK Staff Reporter of THE WALL STREET JOURNAL January 3, 2005; Page B1

"Get ready for another round of technology convergence, bringing more choices -- and more confusion.

"Phone companies are offering TV programming. Cable companies have added phone service. Cellphones are now computers, cameras, video players, navigation and messaging devices. Other gadgets are merging, adding hard drives and Internet connections. Every form of entertainment has turned digital and is zipping around the globe and the home on a high-speed wire, or a wireless network.

"The scene, as industry executives prepare for the annual Consumer Electronics Show in Las Vegas this week, has never seemed more chaotic. The extended forecast: more of the same.

"Indeed, competitive pressures are likely to cause new products and services to merge. Cable and phone companies are already rushing to offer competing 'triple-play' bundles of voice, video and high-speed Internet access, for example, not only to seek more revenues but also to keep customers of their core services from defecting.

"'If you don't have the broadband pipe, five years from now the likelihood that you will keep the entertainment or voice assets diminishes,' says David Dorman, AT&T Corp.'s chief executive officer.

"The pressures could push more companies as well as technologies together, with industry giants likely to look for partners and acquisition targets outside their already-consolidating markets. Forrester Research analyst Ted Schadler, in a new study by the Cambridge, Mass., firm, makes a case for such cross-industry acquisitions as Hewlett-Packard Co. buying Eastman Kodak Co., Apple Computer Inc. absorbing TiVo Inc., Walt Disney Co. eating Electronic Arts Inc. and Google Inc. grabbing Gemstar-TV Guide International Group Inc.

Mr. Schadler concedes the odds of any one of those transactions happening soon are slim, and the companies won't discuss the speculation. But he argues that such giants will need to join forces to create offerings that could drive new demand -- such as phones that send caller ID information to TV screens, televised sporting events that allow viewers to pick camera angles, and new types of personalized online games. ..."

For us consumers, it could not be better.