Too early for a game plan with convergence at first base?

PSP%20gamesSpeculation that Sony is gearing up to launch a mobile phone with gaming capabilities (MW last week) has got the telecoms industry once again talking about its favourite subject: convergence.

Sony’s plans appear to add weight to the view that mobiles will soon make everything from handheld games consoles and MP3 players to cameras obsolete. But there are still those who believe that consumers have not yet shown a desire for a one-device solution.

Sony reportedly filed a US patent application at the end of last month for a gaming phone with a swivel screen to enhance gameplay, although Sony UK claims to know nothing about a phone launch. Experts believe the company will launch a mobile version of its PSP (PlayStation Portable) console under the Sony Ericsson brand to compete with Nokia’s N-Gage, which is relaunching as a piece of gaming software built into handsets rather than a standalone device (MW February 8).

N-Gage will be launched in a range of six phones later this year and Nokia’s head of strategic marketing for N-Gage, Simon Etchells, says: “This is the tipping point – it’s the point at which the mobile gaming market will move on in a significant way.” But Strategy Analytics director Neil Mawston argues that it is still only a small number of consumers who use their phones for anything other than calling and texting. “There is definitely a high-end, techno-friendly segment that is pushing for these devices, but it is fairly niche,” he adds. “Over time people will upgrade their devices, eventually pulling convergence through, but it’s many years off.” 

Protecting PSP
Sony’s plans for a PSP phone are seen by many as a defensive move as the rise of mobile gaming is threatening one of its core products. The same could be said of Apple, which is launching its long-awaited iPhone later this year.

However, the handset market is notoriously competitive and Mawston adds: “Apple is going to be a niche player for a good few years yet. It is a very late entrant to what is a very mature market and I think it is unlikely to get beyond 1 or 2% [market share]. The iPhone will raise awareness of smart devices and give a sluggish usage industry a bit of a boost, but it will have a relatively modest impact.” 

Clued up on convergence
Convergence is arguably the most overused word in telecoms, but the concept – in all its forms – is having such a significant impact on the industry’s biggest players that it is perhaps understandable. With mobile operators now offering broadband, the lines between the established sectors are blurring, and all the networks have had to evolve their business models.

An Orange spokesman says: “We do not consider ourselves a mobile operator any more – quite the contrary. We’re now a total communications company offering mobile, broadband, fixed and, later this year, home TV. The lines have blurred – certainly within the industry and, in many cases, for the customer as well.” 

There is no doubt that convergence is having a major impact right across the spectrum of the telecoms sector and there is a host of “converged” products available from both the manufacturers and the operators. But it seems that, for now at least, supply outstrips demand and it will be some time yet before consumers ditch their favourite gadgets for a high-end mobile phone that promises to do it all.

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