Consumer electronics market struggle with shrinking margins

"The potential for digital convergence is still largely untapped but companies need to focus on consumer needs", says Clint Witchalls, a Senior Editor at the Economic Intelligence Unit.

Witchalls noted that consumer electronic firms may find themselves competing with unexpected rivals as firms that will survive and prosper through this difficult transition must possess the ability to spot opportunities and move quickly to market.

"Speed is of the essence in the convergence game, as is collaboration. Companies have to be open-minded about potential new revenue streams, even if it means collaborating with erstwhile competitors", Witchalls added.

Most modern homes are bulging with digital gadgets but few of them are leveraging on the unique advantages of device convergence which is basically about cramming more functionality onto a single device.

The report reveals that convergence is getting easier and cheaper, as advances in technology mean that many of the drawbacks that have hindered converged devices in the past are now disappearing.

Although, the falling cost of digital technology makes it feasible for the first time to build multi-functional devices for a mass market the commercial payback for some convergence offerings remain elusive.