Digital Display Technology - Consumer Electronics Association

2Convergence ofWireless DevicesOVERVIEWWhat would you rather carry around, a Swiss Army knife,or a Batman utility belt? Remember when Apple Computercaptured so much attention at the International ConsumerElectronics Show (CES) in Chicago in 1992 by introducing ahandheld computer called the Apple Newton? The $700Newton, one of the most hyped consumer products in history,hit the market in 1993. Unfortunately, it didn’t workvery well.And neither did several attempts to copy it.Enter the Palm Pilot in 1997.This personal digital assistant,or PDA, as the industry and media quickly dubbed it, didwork and was quickly followed by several other consumerelectronics manufacturers with PDA versions of their own.Since then, the race by manufacturers to add new things inorder to differentiate their products—has changed PDAsfrom plain old passive mobile computers to two-way interactivewireless communications devices with new featureslike cell phones, e-mail and Internet access, digital imaging,games, GPS navigation and streaming audio and video.But do consumers want several different functions in a singledevice? They love television because of its simplicity andcapacity to entertain, but will they put up with tiny screensand keyboards in a handheld device that may require more thanintuitive skill to use all of its impressive features? In Japan, theanswer is already a resounding yes.The jury is still out in the U.S.A survey conducted two years ago by CEA MarketResearch called “Convergence in the CE Industry” andmore recent studies by independent market researchorganizations, have generated mixed reviews to the all-inoneSwiss Army knife approach, with a device that is smallenough to fit in your hand, but that can handle both voiceand data—including e-mail and Internet access—has all thefunctions of a sophisticated electronic organizer and more.The CEA study found that when wireless phone ownerswere asked about their preferences for converged versusstand-alone products, more than half wanted a combinationwireless phone and PDA.A more recent market study byLondon-based Strategy Analytics Ltd., projects the marketfor PDAs with integrated cellular connectivity at 59 percentof total PDA sales in 2007.A PICTURE IS WORTH…The worldwide PDA market has cooled in recent months. Itincreased slightly in revenue in the second quarter of 2002,but slipped in unit sales, according to Gartner Dataquest, aresearch and management advisory firm. Gartner says Palmstill leads with more than 40 percent market share. Sony,HP and Handspring are close together but still trailing wellbehind Palm.That could change and quickly, according toseveral market analysts, with the addition of just one featureto their products—digital cameras.Japan’s leading wireless carriers already are having huge successwith camera-equipped cell phones. NTT DoCoMo,Japan’s leading wireless carrier, has shipped more than a millioncamera-equipped mobile phones since introducingthem in June. J-Phone, the country’s only carrier marketinga photo phone, started offering phones with integrated digitalcameras about 18 months ahead of DoCoMo and nowhas more than six million camera phone users, nearly half ofits subscriber base. Sharp Electronics produced DoCoMo’sinitial digital camera phone; in mid-July DoCoMo introducedtwo more camera phones, produced by Mitsubishi Electricand Fujitsu. KDDI, Japan’s second biggest wireless carrier,and other Asian and European wireless operators are eitheronboard with digital camera-equipped PDA/cell phones, orsoon will be.“Sony made a big splash with the Clie NR70V, which integratesa tiny digital camera,” says Todd Kort, principal analystfor Gartner Dataquest. Handspring, says Kort, is movingin the same direction, gradually withdrawing from the traditionalPDA market, focusing instead on smart phones withnew features, such as cameras.“Japan’s leading wirelesscarriers already are having hugesuccess with camera-equippedcell phones.”5 Technologies to Watch OCTOBER 2002 9