Cell phones are pretty amazing these days, they are assimilating the functions of cameras, mp3 players, mobile TVs, internet and video players... and even the games that seem primitive to many gamers are a fastly growing multi million market.

Do you think think Handhelds and Cell phones will co-exist for as long as we live or do you think at one point cell phone makers will try to eat the Handheld market ??? Or perhaps Nintendo and Sony will have telephone function in their next handhelds ???

Personally I am not sure how it will end... a big plus for Handhelds is that the typical Cell phone user buys a new phone each year... but with newer cell phones like the Iphone this might change... microchips for cellphones are getting better and use less energy every year... (the Iphone has about as much power as a dreamcast) and since people like gadgets that do everything at once they might just stick to a cell phone if the quality and variety of games get better as they are right now...

I think that a conflict between the two fractions is unavoidable, maybe a peaceful solution will be found, like a Iphone Play cooperation between Nintendo and Apple... hard to tell though and since the Handheld market is doing pretty well these days it would be very hard for cell phones to compete in the games sector... the diversity of models and producers is another boundary for the cell phone... but with chips and storage space evolving they might soon all be capable of playing games with higher hardware standards... I think in 50-100 years there will only be devices that do everything from phone calls, internet browsing, music, TV and games... the question is how and when it will go down ???

well the PSP already ha VOIP, so a full fledged phone isint so far away, Nintendo on the other hand dosent usually tend to provide 'services' so I dont know what they will do.

I'm not sure most people will see the two as being worth merging. Generally, people want to use their phones for information and communication purposes, while they want to use their video game systems for entertainment purposes. Having one eat into the battery life of the other would not appeal to many. Certainly it has done no favors for the game system/cell phone hybrids made thus far.

@ ODC: Yeah the PSP doesn´t seem to profit to much from is multimedia functions... other projects to combine the two sectors like the N-gage have failed... but I and sure its only a matter of time until both markets get into a serious conflict...

As it stands now, one of two things would have to happen for handheld gaming and cell phones to come into direct conflict. One possibility is making a battery that supports a massively larger amount of use time, meaning that you wouldn't have to sacrifice power used for one feature in using the other. And that's likely to backfire, too: people will just leave their cell phones off the charger longer and still complain.

The other, less likely possibility is that cell phones adapt a form of gaming which can only be done effectively if cell phone service is factored into the equation. Cell phones are extremely well-suited to online gameplay, but if there were a way to capitalize on that which both appealed to the market and could not be replicated on handheld game systems without turning them into cell phones or cell phone-capable, then they would be able to compete with and possibly even overcome handhelds. Though it's not assured; it all depends on how much value the non-elite consumer puts into the cell phone-exclusive-feature game.

I must concur, the mobile gaming market is on the rise and revenues should hit $4.5 billion this year, also it is predicted to have a anual growth of over 10%. I think lots of people are interested in having a device that does it all...

http://www.informationweek.com/news/mobility/business/showArticle.jhtml?articleID=208801005

With batterys advancing and chips becomming much more energy efficient I don´t think this will be a problem for very long, most people don´t mind hooking up their phone to a power line every evening...

The main issue in merging two different markets is always value conflict. Three kinds of value conflict, to be exact: values which conflict inherently between devices (direct value conflict), values which conflict only when the devices are merged (simultaneous value conflict), and values which conflict with the separate versions of the features (separate value conflict).

The former is easy enough to recognize. A good example is combining a screwdriver with a hammer. Screwdrivers are valued for being lightweight and easy to handle, while hammers are valued for being heavy and holding a lot of force. Putting the two together would result in direct value conflict.

The middle is a bit more obscure, but still exists. In fact, I listed one before: cell phones and game systems both rely on long-lasting batteries as a key value, but when merged, they have to share a battery and thus eat into each other's power, resulting in simultaneous value conflict.

The latter is the hardest to assess, and the reason why most hybrid products fail as a result. If a merged device is somehow less valuable than the original unmerged devices to the consumers, then people will favor the separate components to the combined unit even if no direct or simultaneous value conflict exists. An example of this is printer/scanners. There are no significant direct or simultaneous value conflicts between the two, yet a fair few users would prefer the units not be shared simply because they only want one or the other, not both. Even when the pricing is close to the same between models, there is a penchant for selecting the product that has the specific features the user is after, and disregarding the models with extras tacked on.

Yes the battery live might still be a problem now but I don´t see it existing in the near future, I don´t see any of the other conflicts you mention as to be very big.

People want the same out of a handheld as they want out of a cellphone, in needs to be small, yet have a big enough screen, be easy to use (newer models are going into the touchscreen direction) and I don´t see the price beeing an issue. You are allready putting an expencive microchip in a cell phone, why not use that power for games ? A scanner and a printer need different hardware, a cellphone and a handhled both need a screen, a micochip and a battery, so you would not pay extra for the handheld or the cellphone. I think its more of a question when/if games with brand names get good mobile versions...

Your analysis is fairly thorough. But the third type of value conflict is sneaky, because you quite literally cannot judge the actual demand for a hybrid unit accurately. When the potential market is enormous (as is the case with cell phones and handhelds; the former with hundreds of millions of customers, the latter with at least a hundred million), the analysis of how much of both markets would value the combination of the two markets is hell incarnate.

You cannot do a cross-section of a group that large and have any accuracy. You cannot assume that the two would be valued as merged by most of your customers since the way that people consider and act around those products varies immensely from person to person. It's just too big a userbase to risk that kind of venture blindly.

About the only effective way to pull off a tactic like that for a cell phone/handheld gaming system hybrid is to test-market the product in a select few large cities throughout a nation. If the product does not take off, then odds are good that the product will not take off in that nation.

I don´t think cellphone makers will market a phone as a gaming machine... just like with mp3, video and internet they will say: "This is the best and the newest phone there is... oh and it playes games too... take it or leave it."  That way they don´t risk alienating the core focus group of cellphone buyers... but with mobile gaming reaching a revenue of $4.5 billion this year it is clear that enough people want the games too... once cellphone makers start pushing the game aspect a little and game devs see the profits to be made the markets will slowly start competeing. Maybe cellphone makers will make it easier for devs by agreing on a standard for gaming-cellphones, that way they could lable cellphone with a strong chip and a big enough touchscreen as gaming cellphones and give devs a wider group of customers...