CONVERGENCE-A VALUE DILUTION SYNDROME

Convergence is an interestingly conflict between a desire and psyche. The heart wants it but the human psyche refuses to use it.

The law and its associated corollaries were conceptualized in 2004, so was the discussion that follows it. However, it even has relevance today too.

 LAW OF CONVERGENCE

In a Convergent Suite, each application contests for attention, hence dilute each other’s “Perceived Value”.

COROLLARY 1

Users subconsciously nominate an application in a convergent suite that is the most important to them as their Principal Application and all other instantaneously become secondary.

COROLLARY 2

Secondary Applications addressing the same need as the Principal Application are more likely to co-exist with the latter but will contest among themselves for attention and dilute each other’s “Perceived Value”.

COROLLARY 3

Secondary Applications that are diverse, typically struggle throughout their life cycles, unless a very special focus is brought on to them.

COROLLARY 4

If the Primary Application has a strong value proposition, then all Secondary Applications diverse or otherwise will have to struggle much harder to experience greater usage.

COROLLARY 5

Human Psyche will not allow two Principal Applications to co-exist in the same convergent suite.

Convergence is a very interesting conflict between the desire and psyche

DISCUSSION

I threw open a case study for discussion to my undergraduate students at the Korea University Business School – why was a specific convergent payment service struggling even after five years of its introduction. One of the smarter students pointed out that my sixth mantras of the Convergence Model holds good – the six diverse payment services are in fact diluting each other’s visibility. Another student added “isn’t a simple user being overwhelmed with technology”. Well, both of them were damn right. Again, with the same class I took up PDA for discussion. The common voice from most students was that it is positioned on too many services, with each struggling for visibility. In our research on what is the principal application of a PDA, we were told five different names. The key application, which is in fact was messaging pad, was not one of them. I wondered how could well established consumer electronic giants from Japan, Korea, Europe and America could go so wrong – not positioning PDA on its principal application but trying to sell on a proposition, which is unclear and intangible. I call this value dilution -   a convergence syndrome.

The technology hardware companies rightly or wrongly have an obsession of overwhelming people with technology, overlooking the fact that more than eighty percent of the population in any market is either technology conservative or technology averse. The technology service providers are no different and take fancy in overwhelming their users with technology. The technology companies may be able to excite people into buying their technology but integrating that into their lives is a different story.

Email again delivers a personal message and was also an established service on Internet before being offered on smart phones. It co-exists with voice on smart phones but is not exactly prospering.  It is in fact surviving on them for the lack of synergy between the hardware and application (Corollary 2). If the email was introduced on a mobile phone, before it got established on the desktop, it would have literally struggled all through.

The usual challenge to technology hardware companies is to differentiate their products and, in the process, often resort to gimmicks like convergence. The service providers like mobile operators also become partners to these gimmicks to increase their uptake. The gullible users are often the victims, who get carried by the newer convergent devices. The winners are the technology hardware companies and not the service providers as the former are able to sell their technology gadgets, however, the service providers land up achieving very little - convergence drives very little extra traffic – adding very little to ARPU.

Convergence excites for it is able to offer high end features to a common man at very little extra cost – thanks to the advancements in microprocessor technology. It also excites masses to invest on it, little realizing that they will hardly use the secondary features during their lifecycles. Convergence is in fact a cherished dream of engineers to achieve optimum resource utilization and my experience also tells that pushing convergence of diverse applications is counter-productive.

Convergence is an interestingly conflict between a desire and psyche. The heart wants it but the human psyche refuses to use it. The challenge to telecommunication service providers is to design a service that the users are encouraged to use it.