Back in the early 2000s, IDC started using the term “converged device” as a way of identifying any device that brought together voice and data in a single form factor. The term offered analysts an easier way to talk about smartphones during a time when there were so many definitions for a smartphone that the term was almost meaningless.

Today, the converged device has become more ambiguous, with executives throwing it around as fill-in for just about any device that combines multiple technologies, not just voice and data. For instance, a smartphone that can double as (or at least control) a set-top box, or a tablet that can perform many of the functions of a laptop or PC, are both instances of different technologies converging in a single form factor.

The industry saw some pretty interesting examples of convergence at this year’s Consumer Electronics Show (CES) with the unveiling of the Motorola Atrix, a smartphone that boasts specs robust enough to run a laptop, a desktop or a set-top box. And then there was Vizio, which unveiled its forthcoming VIA line, which appears to promote intermingling between a smartphone, tablet and Vizio’s line of Internet-ready televisions. HP, which already has an existing line of Photosmart printers that come with app-ready touchscreen tablets, is also promising something big in March that likely will involve a smattering of all the company’s major technological assets.

It’s probably not too far off to say the mobile OEMs – Apple, Samsung, HTC, Motorola and others – have been at the forefront of technological convergence. OEMs have been loading smartphones and tablets with more goodies at every refresh, and there doesn’t seem to be an end in sight. Or is there?

It’s a Game. It’s a Phone. It’s PSP Phone?
So how or why does a portable gaming device become a phone, or vice versa? It’s not all that easy to pinpoint one cause, but the effects can be far-reaching.

“A lot of it is driven by cost and improvements in process and scale that bring down the cost of various technologies, which is why we saw a march towards higher megapixels in digital cameras, even though they had for most consumers reached the point of diminishing returns,” said Ross Rubin, executive director of industry analysis for the NPD Group.

But when one technology gobbles up another, the results can be incredibly disruptive. While adoption of smartphones with high-end cameras may be having an effect on sales of digital cameras, Rubin says even seemingly inconsequential effects are observed that are and are not as obvious.

“There certainly hasn’t been much written about the demise of the watch,” Rubin jokes, noting that smartphones have probably had a “substitution effect” on the watch market, as most people check their phone for the time these days.

But if smartphones and tablets have absorbed various technologies, so too have consumer technologies acquired connectivity. Sony just unveiled the NGP, a new portable gaming unit that integrates 3G connectivity but does not support voice communications.

When asked whether it’s harder for an consumer electronics company to integrate 3G, or for a mobile OEM like Apple or Motorola to build around a technology like a camera or a gaming system, Rubin says the real problem is that consumers are more likely to pay for their smartphone than they are to pay for connectivity on a consumer device like the NGP.

“Because a smartphone has a cellular connection that consumers are willing to pay for because of the mobile voice functionality that it enables, handsets have had a leg up versus various 3G connected electronics,” Rubin says, noting the failure of portable navigation devices because users weren’t willing to pay $10 a month for the service when they could get similar features on their smartphone via an application.

Tablets and eReaders Manage to Co-Exist
Perhaps no two device categories have squared off the way the eReader and the tablet have over the past year. Amazon’s Kindle burst on the scene before the tablet explosion and had established a pretty good customer base right off the bat. Then along came Steve Jobs and his “magical device” with a $500 base price. It didn’t take long for the top two eReaders to retreat to a sub-$200 price tag in light of the iPad’s robust functionality set, which included iBooks.

Some saw the iPad and predicted the death of the eReader, but the dedicated digital reader managed to hold on. Susan Kevorkian, analyst for IDC, says that specs, including the e-ink display technology and battery life, as well as a lower price, were key to differentiating the eReader from the tablet.

Kevorkian says that while she expects the dedicated eReader to maintain its category, there’s reason to believe that companies like Barnes & Noble could reach across the aisle and upgrade to more tablet-like functionality.

“In terms of the overall market, we definitely see a blurring of the boundaries between color LCD-based devices that are marketed as eReaders, like the Pan Digital device and the Nook Color, that might be running the Android OS and may offer a limited selection of apps, but are still marketed as reading devices,” Kevorkian says, adding that the next-generation of those devices probably will be closer to media tablets than devoted reading devices.

What’s interesting about the tablet and the eReader is that far from one eliminating the other, they’ve become almost symbiotic in their relationship. Because Amazon and Barnes & Noble are also book retailers, they have the added incentive to make sure that even tablet users can access their content.

“For Amazon and Barnes & Noble, [branded apps] are a way for them to expand beyond their own branded devices to make access to their content easier and more flexible to more consumers. We see the branded device plus the app play as going hand in hand,” Kevorkian says.

Too Much Functionality?
Tablets and smartphones are really the core concentration for OEMs looking to bake more functionality into a single device. But how far are they willing to go with that proposition? Kevin Burden, vice president and practice director of mobile devices for ABI Research, says there are limitations but perhaps less than there were a few years ago.

 “If you asked me a few years ago whether OEMs are trying to pack as much into a device as possible, I would have said absolutely not,” Burden says. “But this year seems a little bit different, which is partly to do with the OS platforms themselves, which are really opening up to a lot more functionality. These extras are being made available by the platforms and the OEMs are taking advantage of it.”

Motorola’s Atrix smartphone, which is a truly state-of-the-art device, with specs that top out what’s currently possible in a mobile device, could serve as a testament to both Motorola’s hardware and the Android platform’s possibilities. But does the Atrix’s hybrid system, which uses the smartphone and a docking system to power a laptop, signal the beginning of the smartphone as the hub of personal computing? Burden says: no. There’s a point where ergonomics, usability and user preference dictate the boundaries of the device.

“I think the reason why the tablet came around in a lot of ways is because of the realization of what a smartphone is and what it never will be,” Burden says.

Burden notes that that used to be pie-in-the-sky on smartphones – giving presentations, video conferencing, ultra mobility – have all come true but still haven’t seen great traction. “A lot of what succeeds has only partly to do with the technology improvements. What really end up succeeding are technologies and devices that fall into the use cases that people actually desire.”

Motorola’s View On Convergence

During Motorola’s fourth-quarter earnings call, Motorola Mobility CEO Sanjay Jha made multiple mentions of delivering “converged experiences” to consumers in the coming year. While the Xoom and Atrix are indeed glimpses of those intentions, how does Motorola define a converged device? The Xoom and Atrix fit into the converged device category because they combine wireless, mobility and computing, says Iqbal Arshad, corporate vice president of product development for Motorola Mobility. Motorola’s vision for the Atrix puts the smartphone at the hub of personal computing. “[Smartphones] are the device that you always carry with you. The performance and capabilities of today’s smartphones are close to that of personal computers a few years ago,” he says, adding that the number of smartphone users will surpass the number of PC users within the next one to two years. “The vision behind Motorola Atrix 4G is that it extends the capabilities of smartphone by offering a more interactive computing experience through smart docks and software innovation.” And how do you pick up the storage or processing slack when you start talking about the smartphone as a personal computing hub? Why, the cloud, of course. “The ability to use the cloud in connecting users to the content and information they need, when they want it, is essential to a seamless user experience. With the proliferation of wireless technologies, the move towards 4G/LTE, and Wi-Fi networks, the cloud has become a reality,” Arshad says. Just how important was Google’s Android Honeycomb OS in producing the Motorola Xoom? Apparently, it was a large part of the development. “Motorola has stated that we would produce a tablet when we thought there was an OS that would deliver the right user experience. Google’s Honeycomb delivers that robust tablet experience,” he says.