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Friday, June 11, 2004

Big Bang - Digital Convergence via Bweek

Digital convergence is finally happening,and that means new opportunities for upstarts and challenges for tech icons.Digitalization is creating products that can't be categorized as tech or consumer electronics. The walls are coming down.That sets up a collision of three massive industries. In one corner stands the $1.1 trillion computer and software biz, with its American leaders. In another is the $225 billion consumer-electronics sector, with its strong Asian roots and a host of aggressive new Chinese players. The third camp is the $2.2 trillion communications industry, a behemoth that extends from wireless powerhouses in Asia and Europe to the networking stars of Silicon Valley. All three groups will have a hand in building the digital wonders that are headed our way. But none of these industries, much less a single company, can put all the pieces together From global powerhouses such as Samsung Group, IBM (IBM ), Microsoft, and Hewlett-Packard (HPQ ) to lesser-known players such as Taiwanese laptop king Quanta Computer and Hong Kong display maker TPV Technology, all are busy crafting strategies for convergence. Over the coming years, they'll turn today's scribblings on laboratory white boards into thousands of new computerized products and network services. Most will flop. But a few breakthroughs are sure to take off, giving birth to new tech champions and changing the way we live and work. Hossein Eslambolchi, president of AT&T Laboratories (T ), thinks the changes ahead will be as significant as the advent of commercial aviation in connecting people and communities. "This is going to be the most disruptive period in the past 50 years," he says.As networks grow and chips continue to strengthen, companies will work madly to come up with winning products and services. Within the next five years, industry analysts say, practically every machine in the wide realm of communications -- every gadget that sings, talks, beams images, or messages -- will sport a powerful computer and a network connection. And every bit of digital information, whether it's a phone call, a song, a Web page, or a movie, will flow among these machines in the very same river of data..The dramatic shifts ahead are likely to shake up age-old concepts at the foundation of our economy. In the coming markets of moving bits, who owns what? Will people buy their programming and machines? Or will they rent and subscribe? Innovative companies will sort out these questions, leading the way in building new business models for the coming age. Those who figure out how to reach through the networks to deliver customized information and services will be the architects and kings of the converged economy.Craig Barrett,CEO of intel recently said,"After 20 years of talking, this so-called convergence of computing and communications is happening"
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