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BW Businessworld

One Or All?

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E-readers are all set to emerge as an important gadget over the next two years (see ‘In Pixel And Spirit'). An e-reader is a dedicated reading device, showing signs of life at a time when many other devices are acquiring the reading function. Why should anybody buy an e-reader if one can read well enough on a netbook, a tablet or an iPhone? In this era of convergence, why should anybody buy any dedicated device?

This question is increasingly important, as devices are going all-purpose. A smartphone can click pictures, surf the Web and provide location-specific information, among other things. A netbook can serve as a global positioning system (GPS), a reader, an audio recorder and many more devices. If this trend continues, the days of many gadgets could be numbered. We could count among these things small video cameras such as the Flip, MP3 players, audio recorders, DVD players, GPS systems and, of course, the e-reader. But is it so?

Dedicated devices have an advantage over converged devices: they are usually better at their job than the converged device. This is obvious when you compare a camera phone with a digital camera, but not so obvious with the e-reader or many other devices. What advantage would an e-reader, or MP3 player or GPS system have over the converged devices? Would someone carry a phone, a laptop, a GPS system, an e-reader, an audio player, a camera and a few more devices as one travels?

Take a device such as the GPS, which seems to be under threat from the netbook and the smartphone. Many netbooks — and future smartbooks — come with built-in GPS. It costs only $1 for a manufacturer to add this function. You can get GPS function, including turn-by-turn voice directions, on your iPhone with a $10 downloaded software. Yet, GPS is spurring innovation that cannot be put inside a smartphone or a netbook. At least for now.

One example: New Jersey-based firm MVS has a virtual reality system that projects on to your windscreen. While current GPS systems distract drivers, the MVS projection gently guides the driver by giving information well before an approaching manoeuvre. Many GPS systems of the future will provide real time traffic data. Yet, there is little doubt that such systems will be either part of the automobile itself or part of the mobile handset. This is why RNCOS, a market research company, forecasts GPS-enabled handsets will form 70 per cent of the $75-billion GPS market by 2013.

Devices such as the MP3 player, audio recorder and portable video cameras are likely to follow this path. But the e-reader could have a different future. Its technology, E-Ink, provides a superior reading experience. This technological lead is likely to continue in the future, as video displays require a different technology and more energy. Consummate readers will thus prefer an e-reader to a multipurpose device. A dedicated e-reader will be light and small, with displays that do not dazzle in bright light, while lasting a few days on a single charge.

The convergence revolution is thus likely to play differently for different devices. The high quality of dedicated devices will win in some cases, and the convenience of multipurpose devices in some other cases. This is why companies such as Amazon and Barnes & Noble are determined to keep the e-reader as a single-purpose device. Dedicated devices always lead the way. Converged ones play catch up.
(This story was published in Businessworld Issue Dated 09-11-2009)

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