Apple's Sept. 9 rollout of an iPod Nano equipped with a video camera and a larger screen suggests a larger trend of manufacturers concentrating on multifunctional devices, including tablet PCs. If those devices find a foothold in the enterprise and consumer markets, there is a likelihood that dedicated devices such as e-readers and MP3 players could find themselves endangered species against gadgets that not only display text or play music, but also capture video and allow document editing.
When did you last purchase a device that performed just one primary
Purchasers of Amazon's Kindle line, a Flip digital video recorder, an
e-reader or a digital music player manufactured by a company such as Sony could
probably answer "yesterday." But as Apple
Sept. 9 event in San Francisco demonstrated, the era in which a consumer buys a
piece of equipment that serves one function could very well be coming to an
For a while after the 2001 debut of the first-generation iPod-a device whose
form factor, while distinctive, seems positively clunky when compared with its
descendants the iPod Nano and iPod Touch-Apple's digital media players did one
thing: played music.
Then Apple began to layer additional functionality into the devices. There
was video and games and-with the release of the iPod Touch-the chance to
download apps from the App Store. Now, the new iPod Nano, which the company
rolled out during the Sept. 9 event, is
capable of taking video
. That new functionality certainly represents a
direct competitive threat to devices such as the Flip, which have been marketed
on their ability to do one thing well: record digital video at a low unit cost.
Of course, by this point, Apple had also released the iPhone, which allows
its users to make calls in addition to listen to music, play games and perform
other functions. Other smartphones, including Research In Motion's BlackBerry
line and the
Palm Pre and Pixi
, have likewise embraced as a core tenant the idea that a
device should be ever-more-capable of multitasking across wildly different
The next stage may come with the release of the
long-rumored Apple tablet PC
, predicted to roll out sometime in 2010.
Scuttlebutt about that particular device has focused on its 7- to 10-inch multitouch
screen, and supposed running of either the iPhone OS or Snow Leopard. Piper
Jaffray analyst Gene Munster, in
an Aug. 7 research note
, suggested that the tablet would offer
"best-in-class Web, e-mail and media software" and "compete well
in the netbook category even though it would not be a netbook." If
priced at an average of $600 per unit, it could potentially produce revenues of
up to $1.2 billion per year for Apple, according to Munster.
a Sept. 9 interview with The New York Times
, Apple CEO
Steve Jobs reiterated Apple's product strategy with regard to
"I'm sure there will always be dedicated devices," Jobs said,
"and they may have a few advantages in doing just one thing. But I think
the general-purpose devices will win the day. Because I think people just
probably aren't willing to pay for a dedicated device."
That statement would likely be news to Amazon.com CEO
Jeff Bezos, who
has previously suggested that sales of his company's Kindle e-reader constitute
35 percent of the online retailer's book-related sales
. Analysts have
predicted that the Kindle will rack up $1.2 billion in sales in 2010 and $3.7
billion by 2012, although Amazon.com has declined to provide exact sales or
On the other hand, Apple isn't the only company potentially exploring the
touch-screen and tablet market. Further
rumors erupted in August 2009 that Dell and Intel are collaborating on a
touch-screen tablet due for release in 2010
, while Microsoft is adding
touch capabilities to its upcoming Windows 7 operating system.
"Windows Touch and multitouch features provide a natural, intuitive way
for users to interact with PCs," said a
July posting on the Windows Team blog
. "Companies such as Roxio, Corel
and Cegid are all enabling Windows Touch in their applications."
Between Apple and other manufacturers, the creation of an ecosystem of multitouch
devices, paired with increasingly general-purpose media players, has the
potential to crowd out dedicated devices such as the Kindle, particularly if
the latter continues to retail at a particularly high price point.
A Sept. 1 research note by Forrester analyst Sarah Rotman Epps suggested
that mass-market adoption of digital-book readers may be unobtainable unless
those prices come down.
"The cost of the display component is high and sales volumes are still
modest, yet consumers demand and expect ever-lower prices," Epps wrote.
"The bottom line: E-reader product strategists will have to educate
consumers and innovate to bring prices down. Even if they are entirely
successful at both of these feats, e-readers will never be mass-market devices
like MP3 players."
But a bigger issue may be, if the functionality of other devices continues
to expand, then dedicated e-readers, camera devices like the Flip and MP3
players may all find themselves in serious market-share trouble.