Big Four  accounting and consulting firm, Deloitte, has forecast that convergence will generate over a trillion dollars in revenues between now and the end of the decade in a new report.

According to the report, “Digital Convergence: The Trillion Dollar Challenge,” convergence is being driven by three underlying trends. The first is proliferation of digital data which provides a common base for handling diverse types of information – numbers, words, music, pictures, video and more – using the same devices, processing techniques and media. The second is widespread connectivity which helps bring diverse information together, and extends the value and capabilities of a device beyond its out-of-the box functionality. The third is continuous advances in technology from battery life to processor speed.

The report asserts that a wealth of convergence products and services is emerging from online music to Internet Protocol (IP) appliances. Each of these offerings satisfies a real customer need – and most are already generating real revenue and earnings.

Peter Williams, partner and CEO of Eclipse, Deloitte’s digital media division, says, “Convergence became a buzz word during the dot-com boom but the concept was based on technologies and networks which weren’t ready for the job.  Remember that in 2000 there was no widespread access to broadband in Australia so it was simply impossible to deliver rich content through a narrow pipe.

“To best understand convergence, just look at the ways teenagers have adapted their lifestyles - an iPod in every schoolbag, talking with webcams via Microsoft Messenger, downloading all their music and movies with no CD or DVD in sight and hanging out online playing multiplayer games on xBox Live.

“The new xBox and Sony Playstations will effectively be media centres and will give the art of the possible a quantum leap.  In particular the xBox 360 will wirelessly network all entertainment needs throughout the home.

“The world is changing rapidly and there will be big winners and big losers.  Those companies that acknowledge the change and seek to take advantage should do well, those that choose to ignore the change or who try to stop it will be dead in the water.  Also expect that non-traditional players will move quickly to take advantage of the opportunities.  Who would have predicted five years ago that Apple would become the dominant player in online music distribution?”

Williams predicted, “Some of the most significant converged services are expected to be from Voice over IP with some industry analysts forecasting $1 trillion in revenue by 2010. Internet Protocol (IP) appliances which will include next-generation digital music players, home entertainment services, home video phones and enterprise collaboration services will also generate revenue.”