At the advent of every new industry, people simply cannot predict how the industry will evolve. VCRs were supposed to be used only to record missed TV shows. Today every parent watching their daughter’s piano recital has a camcorder attached to a hand to record the special moment and replay it on the VCR. While the VCR may finally bow to the superiority of the DVD recorder and become obsolete, it certainly enjoyed a long run.
In researching this column, I read a New York Times article from January 2000 that said DVDs were just extras at video rental stores at the time. Today you have to search to find the VHS version of a movie, and Blockbuster (at least the one by my house) rents only the wide-screen version on DVD. I know this because our big-screen TV is obsolete because it is (gasp) a full-screen big screen! My point? Technology advances more quickly than ever, and people seem to have adapted quite well to the idea of having to replace the outdated model for the new, improved version. (Except the Fords. We are not getting another gigantic TV since we don’t watch the one we have now.)
Yesterday, the cell phone was used for talking. Today, it appears the cell phone is going to become a camera, among other things. At my sister’s wedding earlier this month, the congregation was snapping photos with their digital cameras and their digital phones. (Remember when cameras weren’t allowed in the church? I suspect traditionalists still frown at this movement, but young people don’t see a problem with recording history as it happens.)
While the phone may become a camera, it likely also will be a radio. A number of industry newcomers and oldtimers are making significant investments not to be left out of this burgeoning segment of wireless. Siemens recently invested in Xingtone, a ring-tone provider, while handset distributor CellStar is teaming with another mobile media content company. Apple Computer Inc. introduced a solution that allows people to wirelessly access iTunes music selections from home stereos. Scores of relationships are being formed across the ring tone, ring-back tone, music download and other businesses.
Carriers could see increased ARPU from these musical services, but carriers that want more of the action are likely to become more aggressive in shaping how this segment of the industry develops.
Prognosticators have been arguing for years about whether the public will accept converged devices. Looks to me like the people have spoken, and the answer is yes, but not in the way the experts expected.
