Convergence: Trends and Challenges

A major concern that follows from the impact of convergence is that monopolists-both the traditional state-owned monopolies and ambitious new market leaders-are using the convenience of technology convergence to enter to other markets, killing small companies there. Though, it is essentially a regulatory challenge, it nevertheless affects the direction in which technology moves. Some IT companies, for example, are driving the convergence, because IT is the common platform for most convergence and also because some IT companies are extremely cash rich, because of their high market value. The consumer electronics companies who understand the consumer well, have been sidelined in this game. The IT companies are trying to export the PC business model to consumer electronics and communication, resulting of course, in open standards and price drops, but at the cost of simplicity. This might be a reason why despite the new capabilities today, convergence has not really happened at the end user side. The new technology that is coming is anything but simple.

There is another drawback of IT companies leading the game. Most major IT companies are US-based and have tried to export that market model in IT and succeeded, whereas companies in other segments have to play by the local market rules. While the IT market dynamics in US, Europe, and India are not very different, telecom or broadcasting markets in these regions are completely different. This is creating a situation where common people learn to use technology, not because they like it, but driven by fear that they might possibly lag behind.

Another danger of convergence is that the objective of business organizations is drifting away from serving the users. The Net has made it possible to create new services easily. Many companies find a niche, package communication, information, entertainment, commerce in a unique manner and float a company, with the objective of building a high paper value, keeping the stock market and not the market for their products/services in mind. Their valuation is also done with the short-term objective in mind. These companies create converged products/services that is aimed at becoming an instant hit and no more. Naturally, technology convergence takes a wrong direction.

End Note
Like its most visible symbol, the Net, convergence defies all definitions, regulation, and market rules. Many companies spend time to understand the phenomenon. The smart ones try to invest their time in directing the way it moves.