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Video rental giant Blockbuster on Monday announced it has offered to purchase Circuit City Stores for $6 to $8 per share, or about $1 billion to $1.3 billion.

Blockbuster initially made the proposal on February 17, but says Circuit City has not provided the due diligence it needs to make a more definitive offer. On Monday, Blockbuster decided to go public. In a letter to Circuit City CEO Philip Schoonover, Blockbuster CEO Jim Keyes notes that the two companies have been discussing proposed tie-ups since December.

(Credit: Blockbuster)

Blockbuster says the offer is intended to "capitalize on the growing convergence of media content and electronic devices."

"Our proposal offers Circuit City a significant premium to its existing stock price and creates a game-changing retail concept with a sustainable competitive advantage. We believe the combination will result in a compelling consumer proposition that will drive significant revenue and margin enhancements as well as cost synergies," Keyes said in a statement.

Circuit City issued its own statement saying it had received the offer, and was still evaluating its options.

A combination of the two companies would add up to an $18 billion business, according to Blockbuster's calculations. Both companies have struggled in the past year--Circuit City posted a $200 million loss near the end of 2008, and Blockbuster has been fending off Netflix's success in online video rentals, as well as the growing threat of digital movie downloads.

Last week news leaked out that Blockbuster had a set-top box under development that would stream video content directly into homes, which was seen by many as a last-ditch effort to adapt its business.

(Credit: OhGizmo)

Note to Toshiba: Different doesn't always mean better. Judging from the photos of its G450 phone, we wouldn't be surprised if the company has hired some of NEC's batty designers.

It's got the oddest-looking keys we've seen since the triangles of Nokia's "Prism" line, but not because of their shape--it's their positions, divided into two circular number pads. Then again, maybe it's not really classified as a phone at all; Toshiba is marketing the G450 in the U.K. as a 4-in-1 gadget that performs as an MP3 player, USB flash drive, and high-speed modem as well as a mobile handset, according to OhGizmo.

You'd think they'd want to conserve space instead of having two keypads, given that the whole device is only 3.8 inches long. But if they were going to go through all that trouble, couldn't they have thrown in a camera, e-book, and DVR too?

(Credit: Lumenlab)

Back in October a North Carolina start-up called Lumenlab caused a bit of a stir when photos of its "Q" were making the rounds, depicting an awfully fetching uber-machine that boasted a 42-inch 1080p HDTV and a fully integrated PC with a terabyte of storage. But little else was known about the mystery box.

Now the company has posted some actual specs--including the price: $10,000. So what does ten grand get you? All of the above, plus 4GB of memory, an overclocked Intel Quad Core Qx9650 processor, and an overclocked XLR8 GeForce 8800 Ultra graphics card with "a monstrous 768MB of super fast GDDR3 memory." Oh, and 3 terabytes of storage on the hard drive instead of the 1 previously mentioned.

Housing all this technology is a handmade aluminum frame that measures only 3.5 inches thick. You can also get the "Qmax" with a touch screen for an additional cost of $1,500. It's actually kind of surprising that they didn't just make this a standard feature because, at these price levels, who's counting?

(Credit: Loewe)

As the evolution of the Apple TV shows, the digital television market isn't just about picture quality. The real fight, as has been predicted for the last decade, is for control of the living room in general.

Germany-based Loewe apparently knows this well and is responding with a new line of multimedia TVs with screens of 32, 37, and 42 inches--with a European flair for design, naturally, in piano black, chrome, or white. Its "Connect" line offers " high-definition viewing, wireless connectivity, internal storage for your music, films and photos and connections for hooking up mobile devices and storage units," according Tech Digest, as well as a DVR. All that's missing is a wristwatch remote to control it all.

Earlier this year, I expressed skepticism that the iPhone would be able to break the convergence rule: historically, consumers have preferred devices that do one thing well over devices that combine multiple equally important functions. (The big exception being the personal computer.)

(Credit: Apple)

Some figures released today by retail researcher NPD suggest I may be wrong. Of the 38 million phones shipped to U.S. consumers last quarter, 50% of them were able to play music. That's up from 25% in the previous year.

Doing some quick math, it appears that the iPhone made up about 6% of all music-capable phones sold in the U.S. during that quarter. That's not a huge number, but there's probably some halo effect. That is, some people may not have wanted to pay iPhone prices, or were unable or unwilling to switch their coverage to AT&T Wireless, but wanted a phone that could play music nonetheless.

I suspect that part of the sales growth in this category is driven by the simple fact that multifunction phones are getting cheaper, and people will always tend to buy the most phone for their money. Moreover, the carriers are promoting music-capable phones because it helps them sell additional services. So are people actually using their phones to play music?

Based on the most recent data I can find on this subject, they are indeed. According to a Mar. 2007 study by M:Metrics, 31% of users with both types of devices (music-capable phone and portable music player) are using the phone as their primary music player, and 11% of that audience are using both equally. This was before the release of the iPhone, so no doubt that percentage has gotten even higher.

A comment in my article about Amazon.com's MP3 download store took me to task for picking nits about aspects of the service, especially about the quality of the usage experience. Fair enough--one man's nit is another person's show-stopper. But when it comes to convergence--hardware, software and services all coming together as they do in digital music, for example--it's taking care of those nits that are crucial to delivering satisfying music. Good enough is just not good enough unless you are happy being an also-ran.

Why? Because convergent systems are tremendously complex--both to create and potentially to use. The trick is to hide that complexity to the user so that it appears easy. Doing that requires huge amounts of work and difficult choices and, yes, paying attention to seemingly small details. Cumulatively these small details add up to either ease the use of the system or to hinder it. Look at how many poorly executed solutions to the digital music system have come and gone over the years. The basic idea of most of them was probably solid; where they fell down was in taking care of the details: ease of discovering music, rules for DRM, pricing, ease of transaction, ease of interface, and so on.

Being trained as a designer I'm perhaps more fussy about these differences than many people. It's hard for me to say, as I've been looking at the world this way for so long. But a recent article by innovation guru Michael Schrage reminded me of how far apart designers are from most people in how they look at the manufactured world, including things like convergent media systems. Schrage was participating on the annual IDSA (Industrial Designers Society of America) and BusinessWeek design awards, and the experience was so unexpected that he says he literally will never look at "designed" objects the same way again.

By far the most striking revelation for me was the collective designer obsession with detail. You've no doubt heard the phrase "God is in the details" or "The devil is in the details"? This design jury had heaven and Earth covered. You can talk "brand" or "vision" or "concept" or "insight" or "elegance" until you're blue in the face, but world-class designers care about how those ideals are expressed in the details. Something that I would dismiss as a niggling detail the designers would say revealed the essential point they were trying to make. Great design is about the ordering and intention of details that you can--or aren't supposed to--see and feel.

This is why Apple is held in such high regard by designers--its unstinting attention to detail. Nothing is overlooked. That doesn't mean they get everything right all the time by any stretch (Dan Saffer at Adaptive Path is complaining that iTunes is not a very good application, for example), but you can always tell that things have been thought about and paid attention to. If you're playing in the same pond as Apple, they set the bar for experience because of how they sweat these details, and that forces you to do the same.

What was worrying about Schrage's article is that it reminded me of how little conscious attention most people involved in bringing these convergent systems into the world have about these small but crucial details. That's probably why Apple has had a pretty much uncontested run for the last five years.

(Credit: Sanwa)

We don't work with numbers much, which is a good thing for a variety of reasons, so we can't get too excited about a mouse with a built-in numeric keypad. But someone must, because this is the second one we've seen lately--the first being one that looks like a miniature George Foreman Grill.

This one from Japan's Sanwa doesn't have the plastic cover but would probably suffice as long as the buttons aren't too sensitive; otherwise, it could make your work a living hell. Either way, it seems that $57 is kind of high for the double duty. Especially when there are mice out there that not only have a keypad but also serve as phones, in both slider and clamshell versions.

CHIBA, Japan--Remember convergence? The idea that the TV and conventional technologies would merge? It came out about the same time as that series ER and has aged about as well in North America.

A TV phone in action.

(Credit: Michael Kanellos/CNET News.com)

In Japan, it's another story. Watching TV on your PC is actually quite common. A huge number of desktops and notebooks come with TV tuners and people actually use them, according to several residents.

"There are a lot of ads for TV PCs," he said Yasutoshi Magara, managing director of Microsoft Japan. Sharp Electronics, he noted, just came out with a PC-TV combo with a 42-inch screen.

Part of the surge here relies on local factors. There isn't a lot of spare space in most cities in Japan. As I type, the chair I sit upon is butting up against a suitcase on the floor, for instance. Combining the TV and the PC screen into one slim package makes sense.

TV on cell phones has also become big. Japan started offering 1Seg, a service that lets you get free digital TV channels on your phone, in April 2006, according to Sharp's Myuki Nakayama. Ten million TV phones from all manufacturers have been bought by consumers since then, she added.

(Credit: M8Cool.com)

In the shotgun wedding between mobile phones and MP3 players, some handsets are trying to seize the upper hand by including larger speakers in their slender frames. The recently discovered "Super Audio Phone" from China, for example, has a speaker that makes it look something like an old-fashioned transistor radio.

Another model from Hong Kong is aiming to go a step further with several small built-in speakers to create 7.1 surround sound, according to Pocket-lint. Regardless of how well (or poorly) they perform, at least we know that they won't look as awkward as some snap-on alternatives on the market. Or you can skip the music/phone combo idea altogether and go with a boombox.