iPhone’s Virtualization of Electronic Gadgets-What’s Next?

Sea Change in CE
Last week I attended the Consumer Electronics Association forum in Phoenix Arizona. This is a three day annual event that I mention in my Blog profile. During the event I have an opportunity to network with consumer-electronics industry executives, review research data and see some new-to-the-world products in the annual "iStage" competition. The conference also features guest speakers covering diverse topics like the economy, lessons in smart marketing, and in how to find one's passion. In addition CEA researchers present their analysis of consumer buying habits and yearend sales forecast for various gadgets including cell phones, game consoles, MP3 players, and big screen televisions.
In reviewing some of the research data, I kept seeing the word "Smartphone" used to describe multifunction cell phones like the Samsung Edge, the Palm Treo, and the Blackberry. Included in this group was Apple's iPhone. But I question lumping the iPhone into this category. I asked one of the CEA researchers whether the use of the term Smartphone was really appropriate for Apple's iPhone. As the cellular telephone industry has discovered (much to their chagrin), the iPhone is far more than a cell phone with computer smarts. It Is nothing short of a powerful handheld computer (Mac) which can morph into virtually any other portable electronic device.

Anything You Can Do iPhone Can Do Better
These days the iPhone's virtuosity extends into replacing familiar products like, a wristwatch, XM portable radio, alarm clock, digital camera, camcorder, and GPS portable navigation. The equivalent functionality is either built into the iPhone or can be added via a software app. What this may mean is that entire portable electronics product categories eventually disappear or get reduced to only a few high-end devices. It makes me wonder whether the CE industry really knows where this trend may be going especially now with the entrance of Microsoft as a major CE player.

Quick History of CEA

To better understand where we're headed with the virtualization of electronic gadgets it helps to look back at how the CEA has evolved over the years as an organization. The CEA's name changes show the evolution of the electronic industry over the years. The CEA originally started as the Radio manufacturers group in 1924 then changed to Radio-Television Manufacturers Association in 1950. Next it was known as the Radio-Electronics-Television Manufacturers Association in 1953 eventually becoming today's Consumer Electronics Association. These changes were done to keep pace with new technology and broaden the product categories CEA represents. CEA members no longer need to be partially electronics manufacturers like Microsoft, Apple, and Sony. Now the likes of Google and Yahoo are also CEA member companies. Looking ahead this is a good trend for the continued health of the CE industry.
Apple vs. Microsoft –The Rematch
Will we see a big-screen TV with a Microsoft or Apple Logo on it? As one who lived through the battle between Apple and Microsoft for PC supremacy in the 1980s, it appears that Apple and Microsoft will once again battle for mind share and market share in the handheld computer business and soon other CE market segments like big screen TVs. After all, a great Apple retail store is a terrible thing to waste on just iPhones, iPods, and Macs.

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Déjà vu All Over Again
As Dr. An Wang, founder of Wang Labs who played a personal role in setting business strategy for the now defunct company could tell you, don't bet your company on a product that can easily be virtualized by a PC. The Wang word processors were technological breakthroughs. They were easy to use, easy to maintain, and did only one function: word processing. The huge market for standalone word processing systems collapsed with the introduction of the personal computer. Early word processing programs like Wordstar and VisiWord gained a foothold in the market against Wang. Finally with MultiMate on the IBM PC replicating the interface and functions of the Wang word processor, the PC had completely virtualized the Wang word processor.
Traditional CE manufacturers had better beware of the PC in all its manifestations, desktop, laptop, and handheld. Even cable TV service providers are not immune to the virtualization of their content into something like iTunes which can stream to users' TV's over an Internet connection by-passing the cable service provider's revenue model.
What's the old saying," forewarned is forearmed?"
References:

http://www.ce.org
http://en.wikipedia.org/wiki/Wang_Laboratories

Copyright: F.A. Daniels, October 29, 2009, all rights reserved.