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First, there was the land-line.

As wireless technology became increasingly more efficient and compact, it started to make sense for people to carry around cell phones. By 2002, mobile phones eclipsed land-lines in total number of call minutes, and by 2010, there were more cell phones in the US than people. Increasingly, young people (myself included) are foregoing land-lines entirely. Why deal with two phone numbers and two voicemail boxes if you don’t have to?

At some point in the mid 2000s, cell phones began gobbling up other handheld devices as well. Cameras, which used to be a few pounds and hang around your neck, shrank to the size of a dime and were integrated into the phone. Next, MP3 players were cannibalized. And now smart phones (aka “converged devices”) can execute most of the basic computing and surfing functionality previously reserved to a laptop computer.

So what’s the next logical step?

It’s clear to me that when offered the choice between two devices and one device, consumers will always choose one device, provided that it has about 75% of the functionality of the device that they’re forgoing. It’s also clear to me that the consumer will always prefer the more portable device in cases where there’s substantial overlap. That means that as the difference in computing power between smart phones and laptops diminishes, laptops will become less and less necessary, until that magical threshold where consumers drop them all together. It’s possible that the laptop I bought last year will be the last one I ever buy.

Welcome to the world of Converged Converged Devices, where a cell phone, a monitor, and a keyboard are the only electronic devices you need to own.

What are some of the implications of this brave new world?

1)      A big shakeup in the software world. Is it possible that Research in Motion has a larger market share of Operating Systems in a Converged Converged world than does Microsoft? It sounds crazy, but if current trends hold up RIM’s market share would be about 7 times greater than Microsoft’s. How about Google Docs versus MS Office? Android is current outselling Microsoft’s smart phone OS by about 30 to 1. Let’s just say the big names in software could be very, very different than the ones we’ve grown accustomed to over the past 20 years.


2)      Accelerating reliance on the cloud. Even before ditching their laptops, storage is being offloaded to the cloud at an alarming rate. The next big thing is going to be programs that rely on a hybrid of native and cloud resources to leverage the computing power of a mobile device. That’s the idea behind Amazon’s Silk Browser, that relies on the Internet not only for information but also to help it process that information. In a world where you access all of your personal files from your cell phone, which is more likely to be lost or stolen, it’s even more important to have very few of those files domiciled domestically. As big as the talk is now about cloud computing, we may be looking at the tip of the iceberg.



3)      AT&T and Verizon don’t own you anymore. Just kidding, they still do. While the “last mile” of the network might be thrown into flux by people dropping their wireless service at home in favor of their smart phone’s data plan, big telecoms still own the long-haul infrastructure that gets information from point A to point Z. That means they ultimately own the Internet. You’ll be paying them every month until you’re old and gray.

I’m sure I’m overlooking a ton of implications of the Converged Converged world. If you can think of one, let me know in the comments.

Nick analyzes portfolio companies and their target markets to help them focus on opportunities for
profitable growth.

  • Anonymous

    Fascinating.  Interesting way to think about it.


    PS – I try try try hard to use and like google docs and open office but… they really stink up the place.  Those spreadsheets aren’t that different from Visicalc or Lotus123.  I will say that they work a tad bit better online than Office365, but MS has been closing that gap like crazy.  And as my time is worth something to me….

    • Nicholas Petri

      I agree that they have a long way to go, but I’ve got to believe Google will figure it out if/when Android really starts being used as a business OS

      • Anonymous

        Maybe.  I don’t see a big track record with google ‘figuring stuff out’ if it’s not core search/advertising.  I give them Android, but they were basically able to copy the Linux playbook on that one.  Otherwise, not so much.

        I’d be much more sanguine if it were Amazon or Apple going after the office market.

        Speaking of which, I just to an update to the Lucid Chart UI announcement and they’ve created … Visio.  Amazing.