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What Clayton Christensen Got Wrong (2013)

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Re: What Clayton Christensen Got Wrong (2013)

#41

Post by chongli »

barrkel wrote: post #30
throw7 wrote: post #5

Earlier quoted context omitted.

ISTM that the author is not so much saying or arguing people are not rational, but that the economic definition of "rational" is missing the modeling of consumer behavior in this area. (i am not an economist.)

My GF is an economist, and she takes great exception at any phraseology that describes people as irrational. As far as she's concerned, everybody is rational. See this for more details: http://mises.org/library/what-do-austrians-mean-rational

Praxeology is a fringe theory espoused by radical libertarians. I'd even go so far as to call it a just-so story.

Re: What Clayton Christensen Got Wrong (2013)

#42

Post by auganov »

minthd wrote: post #4

That's a very interesting theory, but it's supported by very few examples, and the examples are pretty weak. In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status). In a sense, the same applies f…

Ironically fast fashion is very much disrupting the fashion industry in a classic innovator's dilemma way.

Re: What Clayton Christensen Got Wrong (2013)

#43

Post by lemmingsleft »

encoderer wrote: post #38
lemmingsleft wrote: post #19

Ben Thompson is mostly wrong: Customers don't 'buy' iPhones, Carriers do i.e. iPhones are protected from low end disruption by carriers subsidizing and obscuring the price with plans/contracts. In markets where carrier subsidy isn't as popular (e.g. Europe) iPhone market share is very low. Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product. NB Apple was always careful to…

I disagree. I think people shop for a phone the way many people (unfortunately) shop for a new car: On the monthly payment, not the sticker price. All that matters is that the carriers finance the phone, subsidies are dying. Every major US carrier now has installment options. > Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product. You don't think it's because they essential…

> You don't think it's because they essentially invented the market, starting out at 90% market share?

Apple essentially invented the harddrive digital music player with iPod+iTunes and maintained a +80% marketshare for the lifespan of that product

> I disagree. I think people shop for a phone the way many people (unfortunately) shop for a new car: On the monthly payment, not the sticker price. All that matters is that the carriers finance the phone, subsidies are dying. Every major US carrier now has installment options.

The monthly payments for cars vary widely with the differences measuring in hundreds of dollars per month. The monthly payments for contract cellphones in USA are mostly the same for a $0 low end phone or a $0 iPhone. Indeed for many years AT&T/Verizon/Sprint wouldn't give a discount on the monthly plan even if the consumer brought their own phone which made it slightly irrational to not sign a contract. It's impossible for the low end to disrupt when the high end is the practically the same price.

Re: What Clayton Christensen Got Wrong (2013)

#44

Post by lemmingsleft »

jobu wrote: post #28
lemmingsleft wrote: post #19

Ben Thompson is mostly wrong: Customers don't 'buy' iPhones, Carriers do i.e. iPhones are protected from low end disruption by carriers subsidizing and obscuring the price with plans/contracts. In markets where carrier subsidy isn't as popular (e.g. Europe) iPhone market share is very low. Likewise, iPad market share is dropping quickly becausr there are few subsidies for that product. NB Apple was always careful to…

This model is changing due to disruption from T-Mobile. With AT&T you either buy a phone up front or pay for it in full over 18-24 months. Not sure why, but they do still have a subsidized 2-year plan, but the monthly rate is higher and you end up paying more than the cost of the phone over 2 years.

The model is changing slowly but keep in mind that TMobile, Verizon, Sprint, AT&T are still incentivised to heavily push the iPhone due to multimillion units they've essentially preordered when partnering with Apple

http://www.businessinsider.com/apple-verizon-iphone-2013-7 (NB the numbers were wrong, and iPhone demand and growth keeps increasing, but the underlying business relationship is as described)

Re: What Clayton Christensen Got Wrong (2013)

#45

Post by blowski »

duaneb wrote: post #32
pilsetnieks wrote: post #29

Earlier quoted context omitted.

He was absolutely right about the iPod, except that the company that disrupted Apple was Apple. Jobs ostensibly was "deeply influenced" by "The Innovator's Dilemma," so it's not inconceivable that he learned from it and cultivated disruptive projects within Apple.

Meh, I think spotify (and related services) probably made the ipod obsolete for a certain class of smartphone users.

...and it helped that Apple made 'iPods' (i.e. iPhones) that were compatible with Spotify, instead of just blocking them. That's exactly what the OP is saying - the way Apple constructed the App Store ending up obsoleting the iPod.

Re: What Clayton Christensen Got Wrong (2013)

#46

Post by minthd »

erikj wrote: post #8
minthd wrote: post #4

That's a very interesting theory, but it's supported by very few examples, and the examples are pretty weak. In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status). In a sense, the same applies f…

Can you define the "true" gamers?

Roughly, gamers("true gamers") VS casual gamers.

Re: What Clayton Christensen Got Wrong (2013)

#47

Post by minthd »

mark212 wrote: post #14
minthd wrote: post #4

That's a very interesting theory, but it's supported by very few examples, and the examples are pretty weak. In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status). In a sense, the same applies f…

> the consumer really buys buys psychological value(status, attention, etc), not user experience please explain the difference, other than what seems to be your pejorative value placed on psychology. Why would it be bad to want to feel good when using a piece of tech and prefer it over another piece of tech that is better on other metrics? Psychology (broadly stated) is the user experience.

I have no ill will towards psychology, but to my understanding ,user experience(as in "the way the product is designed") is a different thing from status, etc.

Re: What Clayton Christensen Got Wrong (2013)

#48

Post by minthd »

blowski wrote: post #9
minthd wrote: post #4

That's a very interesting theory, but it's supported by very few examples, and the examples are pretty weak. In the example of clothing and fashion - the consumer really buys buys psychological value(status, attention, etc), not user experience with his extra money, and i'm not sure those goods can be "good enough", because some have arms-race logic build internally(for example status). In a sense, the same applies f…

> the consumer really buys buys psychological value I think that's what the author is saying - businesses don't buy printers thinking about how the printer will make their staff feel, whereas when people buy iPhones, how they feel is a big part of the decision. The idea that I can afford to buy an excellent user experience for myself is very much part of that status value. Apple has exploited those feelings so that i…

I think Apple's uniqueness is that it used the fact that it invented the iPhone and for quite a long time had the best user experience in it, to create a very strong brand, and even if android achieves similar user experience(some say it did in kitkat/lollipop, other say with large screen phones) ,Apple's brand advantage will still offer a huge protective moat around some segment of the population.

BTW, modularization is also supposed to offer faster time to market, and we've seen that with large screen phones and Apple's slow response to them(probably because it system was integrated ,hence harder to adopt to a different module).

Re: What Clayton Christensen Got Wrong (2013)

#49

Post by gruntled »

thramp wrote: post #39
gruntled wrote: post #33

Earlier quoted context omitted.

That's exactly what you would expect if a "low end disruption" is just getting started. The low-cost disruptor picks off some but not all of the market, and doesn't immediately compete for the most attractive customers (because that fight's too hard for them at the moment). That's what puts the incumbent in an "innovator's dilemma": do you chase the high end and high margins, and if so which high-end niches do you ch…

The thing you’ve gotten wrong with wrong the “design lovers” you mentioned is that Apple’s customer base are entirely those quote-unquote design lovers who happen to be just normal consumers. The entire point of the article is that competing on user experience pretty much side-steps the whole theory of low-end disruption.

I understood the article, thanks. I'm just not convinced.

The debate hinges on this: is UX a special basis of competition that can't be disrupted? Will consumers pay a premium for better UX forever? Will the cheaper alternative never be "good enough"? Won't people put up with a few minor annoyances? What if it saves them money?

I think UX is a hygiene factor: when it's bad it annoys you to the point where you do something about it, but when UX is good enough, most people start worrying about other things.

That's different from design: I think some people will continue to pay a premium because they love Jony Ive designs and they can afford it. And some will pay for a status symbol. And some will need the performance. But none of that is the mass market.

Re: What Clayton Christensen Got Wrong (2013)

#50

Post by sogen »

gruntled wrote: post #33
sogen wrote: post #26

Earlier quoted context omitted.

Oddly I saw the opposite: my nephew and his friends using iOS only. Yesterday he bought an iPad mini with his savings, I suggested him to get an Android tablet "hey, an android will cost you 1/3", but he declined, because all his friends had invested a LOT of time on their (iOS) games.

That's exactly what you would expect if a "low end disruption" is just getting started. The low-cost disruptor picks off some but not all of the market, and doesn't immediately compete for the most attractive customers (because that fight's too hard for them at the moment). That's what puts the incumbent in an "innovator's dilemma": do you chase the high end and high margins, and if so which high-end niches do you ch…

Agreed.

Android has been "good enough" for millions of people. From their ugly start to Lollipop, they have been good enough for many people to choose Android as their primary platform.

This is similar to many of Christensen examples, such as the mini mills disrupting "Big Steel" companies by providing "good enough" cheap steel, and slowly but steadily getting better and better.

Android right now is in that phase, getting better and better, and now is as good, if not better, than iOS.

Interesting times.

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