Where Have All The Single-Function Devices Gone?
Today's cell phones can play MP3s, and the newest MP3 players can play video and view photos. PDAs roll numerous productivity and entertainment functions into one handheld device: email, calendar, voice, camera, music, and video. Consumers faced with so many technology choices are forced to ask themselves when a device crosses the line from manageable multitasker to operational overload.

The Rules Of Portable Multitasking
Device-makers interested in producing a multifunction portable device should heed the following lessons:

No. 1. Don't obfuscate the core function of the device. Learn from the mistakes of the iPod photo -- focus on your device's primary function and market additional capabilities to consumers who are already sold on the core purpose. Although the iPod retained its photo-viewing capability, the return to the simpler iPod name restores the device to its true intention: music.

No. 2. Only add functions that don't detract from the core application. Although they don't detract from voice functions, camera phones -- with their low resolution, hard-to-focus lenses, and small screens -- won't replace consumers' standalone digital cameras. But there are distinct times when consumers will opt for their camera phone: when they want to quickly share a photo with friends (26%) or when it's the only camera they have with them (37%).

No. 3. Price multitasking devices based on primary markets. Smartphones -- those handy devices that allow consumers to combine a portable voice device with productivity functions -- appeal to a wide range of consumer segments. Audiovox's SMT 5600 might appeal to a more mainstream voice consumer who desires a richer mobile experience enabled by a familiar Windows OS. However, Palm's Treo 650 -- with its QWERTY keyboard and proprietary Palm software -- appeals to businesspeople who wish to be constantly in touch via email and SMS. These devices are priced accordingly: The SMT 5600 targets the average consumer at $150; the Treo goes for the business market, priced at $299 and up.

No. 4. Watch users carefully. In his book Democratizing Innovation, Eric von Hippel cites that depending on industry, 10% to 40% of customers modify products for their own use. Keeping a close eye on the habits of these "lead users" is critical to innovating quickly and avoiding the risk of multifunction overload. One interesting example is the iPod shuffle. After seeing that lead users of the iPod were using the shuffle feature with great regularity, Apple decided to actually strip down features to better serve these users at a lower price point. This is a great example of consumer-driven innovation -- going against the multifunction device tide -- with great success, by keeping a close eye on users.

The Future Of Portable Multitaskers
Today's trends in portable multitasking devices raise some questions for the future of CE.

• Will the BlackBerry displace the laptop? No. The BlackBerry works for short correspondence like email, but for productivity like calendar and contact management and for voice, its small size is a shortcoming that it can't overcome. Most consumers won't use a BlackBerry to read documents of any length or to play active multiplayer games like Doom. And fear of "BlackBerry thumb" will prevent anyone from composing a novel -- or even a novella -- on their addictive PDA.

• Will satellite radio and MP3 portable devices converge? Yes, they already have with Sirius Radio's S50. As soon as Apple, Dell, Creative, or Sony can strike a deal with XM and/or Sirius, music, sports, talk, and news fans everywhere will rejoice. An audio device any way you slice it, the dual MP3-satellite radio functionality appeals to comparable consumer markets, and neither function detracts from the other. This MP3-satellite radio device merger makes so much sense that we're surprised that a portable audio multitasker like this hasn't already happened.

• Will the cell phone replace the iPod? Maybe. Motorola's ROKR, Samsung's SCH-A950, and Sony Ericsson's W800i have taken strides to make phone-based audio content management and enjoyment easier for consumers. But the mobile music experience that these devices deliver still cannot compare with that of Apple's iPod. Device-makers will have to up the ante on mobile storage, software, and processing speed to get consumers to reach for their cell phones when they want to hear Eminem's Curtain Call album. And with the PC currently at the center of the consumer digital music experience, cell phones will need to operate as smoothly and seamlessly with the PC as an MP3 player -- or consumers will continue to opt for their iPods.

Research Referenced In This Issue Apple Kick-Starts A Legal Video Download Market (38054) CBS And NBC Dismantle The TV Schedule (38187) CES 2005: Digital Devices Looking For Content (36303) Cisco/Scientific-Atlanta Drags Cable Toward IP (38238) Consumer-Focused Innovation (36181)    iPod photo: Stick To Music (35147) Louis Vuitton Takes Online Luxury Shopping Mainstream (38146) Microsoft Embraces Ad-Supported Software Services (38157) Microsoft Media Center Reaches Europe (38069) Mobile Music Moves Beyond Ring Tones (35131) Mobile Music Needs A Tune-Up (37688) Nintendo Takes Gaming Global With Wi-Fi (38226) Paid-For Content Needs More Flexibility (38144) The Consumer Device Adoption Cycle (38010) The Future Of Digital Audio (36428)    The State Of Consumers And Technology: Benchmark 2005 (36987)    When Will The Phone And PDA Merge? (35638) Where Should I Print My Digital Photos? (36248)

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