What Clayton Christensen got wrong

Ironically, it was because of his disruption innovation theory why I thought immediately after I saw the iPhone that it's going to be disruptive for the whole smartphone industry, and also why I thought Nokia and RIM will be the last companies to adapt to the new smartphone world (which is exactly what happened).

I guess Clayton Christensen put too much focus on the "low-cost" part of the disruptive innovation, which I suppose does happen more often than that, but the way I see disruptive innovation is making some things "10x better" than before, and those things need to be things that the market wants, obviously, otherwise they're pointless.

In a way he was also right, just not about the iPhone - but about Android. Android is also disruptive to the iPhone, and it's more about the low-cost strategy than doing some things much better.

It's also helping noname OEM's create pretty quality devices for very low-cost, and Android has also disrupted paid operating systems like Windows Mobile, and even the desktop Windows, and continues to do it:

http://static5.businessinsider.com/image/523376fe69bedd1c3ec...

So maybe Clayton is ultimately right. The iPhone "changed the game", but it will be Android the one to reap most of the benefits from this "disruption".

Well you see these guys (Media and research agencies) Play with Statistics you convince you. You can give me any data and tell me in what favor I need to give my inferences and I will get it out of the same data.

So I wont suggest to go with this conclusive analysis, rather look at the raw data and make your own sense.

Something about Marketing: You see one really cant compare A company with B company if their market and their strategies are different. Yes, they do intersect at some point and we need to see who wins at the intersection.

Example: Apple is into: Computer + phone + mobile OS + Computer OS etc.

Apple V/s Android: When you compare Android with Apple: Compare iOS: And you will see that iOS is targeted to only a specific segment of society. Wherein Android is like a mass product. The reason Android is having higher market share is because in the third world country it is available as cheap as: 70$ V/s Apple (Iphone C) at 550$ (Both not on contract).

(Note: Android wont disrupt apple. These industry maturing will. With players having expertise in different domain come together to create final product. (Reference: Product interface) )

Apple V/s Samsung: Same story as above: Samsung is spurred across the segment (mass product) and hence claims to be having higher market share. Which is right. It might be more profitable.

Its like: Class / Higher Profits V/s Mass / Scale = Apple V/s Samsung (Note: Look at it from a business perspective not user, and we see Samsung is a better model given current stage of market)

But here is an important learning: "Elephants Cant Dance" You see Apple is now a BIG established Brand. They have Brand equity (Reason they can charge higher prices). Their Market segment is fix and they cant afford t dance / change now, to say Mass / Scale. It will hurt current market (Existing customer) sentiment. Though iPhone 5C was an attempt to try and gravitate towards Lower end market.

Back to Clayton theory:

1. He talks about theory as Lenses. Which doesn't necessarily indicate that what you see through that lenses is right or wrong. You are free to choose some other lenses as you deem fit.

Looking through the lens of disruptive innovation: I will side him. Even though Customers dont really see these trends they do affect businesses and eventually customers are convinced to align with the change in market.

Apple isn't being "disrupted". It's going through the exact process it expects and plans for. Apple can't be Samsung without ceasing to be Apple. So it must continue being Apple. Apple's mistakes during the 90s were to try to compete on price and then to license its OS (imitate compaq then Microsoft).

Bear in mind that christensen's theory of disruption is more deadly to samsung than it is to apple. Modularization will eat the guy whose business model is makig bazillions of different models with no real value add before it hurts the guy with a premium brand.

Indeed, one could argue that apple's biggest danger is to be perceived as the big ordinary brand, and gaining too much market share, especially with cheap products, would do exactly that. (But Apple avoided this with the ipod -- no mean trick.)

BTW no-one except samsung knows if samsung makes more profit than apple in mobile except samsung. You're taking punditry not in evidence and quoting it as fact.

Phones are computers. They're bound to become more complex and powerful over time. Who best understands this and constantly innovates to manage this complexity? Not Samsung. Apple's approach not only pays for this constant innovation, it acquired and retains the people who most care about it. As Christensen himself argues — it's very hard for a company to internally sustain competing business models, and Samsung is in the commodity imitation business (everywhere, not just phones). Just as it can't easily be Apple without ceasing to be Samsung, Apple can't be Samsung without ceasing to be Apple. What's odd is that everyone is happy to let Apple be mercedes. bmw, porsche, and rolls royce while they fight to be GM and Toyota.

This highlights the problems of strategic thinking in general. You can always miss something, which is why strategy should be taken with a grain of salt. It's also why some of the great strategists fail as managers of their own firm. (Look at Monitor, founded by some of Clayton's colleagues at HBS)

All that said, I'm still glad that he went out on a limb, and that he was able to fess up to the mistake. Very few business or econ professors are willing to do either.