What Clayton Christensen got wrong
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What Clayton Christensen got wrong
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Re: What Clayton Christensen got wrong
#2Christensen's theory, as I understand it, also does not explain Gucci and Prada. Apple products may or may not have an "objective" advantage relative to the competition (I believe they do not, but I am aware this is widely disputed), but either way I believe that fashion and signalling is the single largest factor in Apple's sales success.
This is not, by the way, a disagreement with the article; I just think the article under-emphasizes this aspect.
Re: What Clayton Christensen got wrong
#3 In a June 2007 interview, again with Businessweek,
Christensen reiterated that the iPod was doomed,
and further predicted that the iPhone would not
be successful
Also, Apple has demonstrated time and again that they're willing to 'disrupt' themselves by introducing hugely popular new products that erode their own margins. See, for instance, the iPod nano, the iPad mini, and, now, the iPhone 5c[1].
I think Christensen got it exactly right. He's just incorrectly applying his own research.
[1] Yes, yes. Apple hasn't released any numbers on the 5c yet. But, just wait. It's going to be huge.
Re: What Clayton Christensen got wrong
#4In a June 2007 interview, again with Businessweek, Christensen reiterated that the iPod was doomed, and further predicted that the iPhone would not be successful The iPod was doomed, and it was the iPhone that killed it. Also, Apple has demonstrated time and again that they're willing to 'disrupt' themselves by introducing hugely popular new products that erode their own margins. See, for instance, the iPod nano, the…
You should try reading the whole article.
The OP's point is that Christensen has two theories of disruption, one of which is invalid. The first, new market disruption, to which you are referring with your comment, is not controversial. The OP would likely agree with you.
The second, low-end disruption, holds in business-to-business markets but fails in consumers markets.
Thus, the iPod was not killed by a low-cost and standardized competitor (which is the incorrect prediction of low-cost disruption), but by a vertically integrated highly differentiated competitor (a possibility under new market disruption).
Re: What Clayton Christensen got wrong
#5Low-end disruption hasn't set in because of the carrier model. It doesn't matter than the iPhone costs twice as much as a Nexus 4 because most people will only pay $200 anyways. This works in Apple's favor. It's also why the iPhone 5C is going to be so big for them; they can sell last year's phone as though it were new and barely drop the price. The margins on that phone are going to be gigantic. It's a direct response to their stock troubles, by the way.
I wonder at what point does the carrier model break. If a high end phone only costs $300 - $350, when that becomes the norm I mean, do people still agree to 2 year contracts in order to trim that down a hundred dollars?
Re: What Clayton Christensen got wrong
#6Low-end disruption hasn't set in because of the carrier model. It doesn't matter than the iPhone costs twice as much as a Nexus 4 because most people will only pay $200 anyways. This works in Apple's favor. It's also why the iPhone 5C is going to be so big for them; they can sell last year's phone as though it were new and barely drop the price. The margins on that phone are going to be gigantic. It's a direct respon…
The carrier model doesn't exist equally in all places.
Re: What Clayton Christensen got wrong
#7Some very interesting points. I think the thesis can be made even stronger by observing that the flaw in Christensen's model is that he views a product only as a means to an end. Two products that provide the same outcome are identical, so the cheaper one will win in the market.
This assumption holds for business decisions, but consumers are people and are capable of having experiences. I can love or hate the experience of using a product — that's a fundamentally different kind of evaluation that happens while I'm using the product, not after. A car is useful if it gets me from A to B - that means I get utility from it once I've arrived at the destination. Getting to the destination matters, but so does the journey. If I hate driving the car, if I feel stressed out and exhausted while driving, I'm going to value that in a way that a business won't and can't.
Re: What Clayton Christensen got wrong
#8Apple hit a perfect storm, and hit it perfectly, partially because they helped create the storm.
Historically excellent product strategy, design, and marketing to enough fashion conscious, deep (enough) pocketed, perceived ease of use prioritizing, quick twitch, mass market of buyers without a second brand being strong enough (until now) to make it a buying "decision".
The masses went out to buy, not to compare or contemplate buying, partially because Apple created (much of) the market to begin with. Perfect storm meeting perfect execution.
Re: What Clayton Christensen got wrong
#9According to low-end disruption, a bag is a bag is a bag. The credit card statement reflecting my wife’s birthday says otherwise!
Great line.
Re: What Clayton Christensen got wrong
#10It is interesting to separate consumer from business when looking at this theory.
Prof Baba Shiv is a Neuroeconomist from Stanford, and has been looking at the neurological effects of "emotional attraction" to a product.
His current thinking (as of Nov last year at least) was that a positive emotional response to a product has a multiplier effect on the premium that we will place on that product. Thus, if a product can get an irrational emotional positive response (through how it looks, feels, makes us feel connected or cool, etc.), then this needs to be taken into the mix when discussing relative positioning. As mentioned - it is way more than the mere product specifications.