5 ms·

It's incredible that he worries about disruption, when if AT&T were to disrupt its own text message model, they'd be lauded for it by customers and technology a

by tiles 14y ago

It's incredible that he worries about disruption, when if AT&T were to disrupt its own text message model, they'd be lauded for it by customers and technology advocates. What do large companies gain by not being the first to disrupt their own markets, aside from obsolescence?

yxhuvud 14y ago
There is a lot of inertia in the systems, and if they should choose to try to disrupt the market in a way that doesn't work, then they will lose a whole lot.
- rhizome 14y ago
  It's not inertia, it's addiction.
rudiger 14y ago
> What do large companies gain by not being the first to disrupt their own markets? They can continue to extract massive profits from their existing market.
- SatvikBeri 14y ago
  This is the key point of The Innovator's Dilemma. On the one hand, disrupting yourself means cannibalization and strategies that almost certainly seem unprofitable on paper. On the other hand, if you don't disrupt yourself someone will do it for you. Considering Apple's success I'm inclined to say that disrupting yourself before anyone else has the chance to is the right long-term move, but I haven't studied the topic in enough detail to be sure.
  - Retric 14y ago
    The iPhone attacking the iPod before Android did so is IMO a great example of The Innovator's Dilemma. Many companies would have tried to charge more for iPod capability's on the first generation iPhone. Instead Apple realized cellphones would never be great MP3 players so even if they cannibalized some sales early on trying to maintain an artificial distinction would not be useful in the long run. In some ways I think they even helped keep the iPod concept alive longer by giving the impression that using a phone for an MP3 player was a compromise not a replacement. Yea, your phone can do this, but why waste the battery life?
    - raganwald 14y ago
      And we are watching Apple’s iPad dancing around the outskirts of the MacBook Air market. A more old-school market would be working very hard to force the markets to be completely segmented, strongly differentiating OS X from iOS and so on. Instead, Apple is making OS X behave more like iOS, reducing the differentiation and creating opportunities for the iPad to steal MB Air sales.
    - elithrar 14y ago
      > Instead Apple realized cellphones would never be great MP3 players so even if they cannibalized some sales early on trying to maintain an artificial distinction would not be useful in the long run. I believe they came at it from another way: if someone is going to eat at your sales (iPod), it might as well be you (iPhone). That's been Apple's mantra for a while. And although anecdotal, most people I know with an iPhone (or Android smartphone) don't buy new iPods. And if they do, it's a lesser model (i.e. for excercise); not to the same value as before.
scoofy 14y ago
Tim Wu wrote a book about this, The Master Switch; essentially the big conglomerates have a good thing going and would rather bury their new technology, since they already have a good thing going, than take a risk on new tech. Wu calls it "the Kronos effect"; essentially they try and kill their children for fear that their children will dominate them.
- joelhaus 14y ago
  Excellent book. The telco's clearly have the incentive and power to suppress competition. In fact, they are actively doing it through their legislative influence (e.g. state bans on public broadband networks) and vertical integration with content providers (e.g. Comcast/NBCU). The moment both Apple and Google embrace an interoperable messaging standard and include a native OS app, SMS will suffer a quick death. In the meantime, consumers will continue to be gouged. It's truly a shame that Stephenson's nightmares have not yet come true.

by tiles 14y ago

yxhuvud 14y ago

There is a lot of inertia in the systems, and if they should choose to try to disrupt the market in a way that doesn't work, then they will lose a whole lot.

rhizome 14y ago
It's not inertia, it's addiction.

rudiger 14y ago

> What do large companies gain by not being the first to disrupt their own markets? They can continue to extract massive profits from their existing market.

SatvikBeri 14y ago
This is the key point of The Innovator's Dilemma. On the one hand, disrupting yourself means cannibalization and strategies that almost certainly seem unprofitable on paper. On the other hand, if you don't disrupt yourself someone will do it for you. Considering Apple's success I'm inclined to say that disrupting yourself before anyone else has the chance to is the right long-term move, but I haven't studied the topic in enough detail to be sure.
- Retric 14y ago
  The iPhone attacking the iPod before Android did so is IMO a great example of The Innovator's Dilemma. Many companies would have tried to charge more for iPod capability's on the first generation iPhone. Instead Apple realized cellphones would never be great MP3 players so even if they cannibalized some sales early on trying to maintain an artificial distinction would not be useful in the long run. In some ways I think they even helped keep the iPod concept alive longer by giving the impression that using a phone for an MP3 player was a compromise not a replacement. Yea, your phone can do this, but why waste the battery life?
  - raganwald 14y ago
    And we are watching Apple’s iPad dancing around the outskirts of the MacBook Air market. A more old-school market would be working very hard to force the markets to be completely segmented, strongly differentiating OS X from iOS and so on. Instead, Apple is making OS X behave more like iOS, reducing the differentiation and creating opportunities for the iPad to steal MB Air sales.
  - elithrar 14y ago
    > Instead Apple realized cellphones would never be great MP3 players so even if they cannibalized some sales early on trying to maintain an artificial distinction would not be useful in the long run. I believe they came at it from another way: if someone is going to eat at your sales (iPod), it might as well be you (iPhone). That's been Apple's mantra for a while. And although anecdotal, most people I know with an iPhone (or Android smartphone) don't buy new iPods. And if they do, it's a lesser model (i.e. for excercise); not to the same value as before.

scoofy 14y ago

Tim Wu wrote a book about this, The Master Switch; essentially the big conglomerates have a good thing going and would rather bury their new technology, since they already have a good thing going, than take a risk on new tech. Wu calls it "the Kronos effect"; essentially they try and kill their children for fear that their children will dominate them.

joelhaus 14y ago
Excellent book. The telco's clearly have the incentive and power to suppress competition. In fact, they are actively doing it through their legislative influence (e.g. state bans on public broadband networks) and vertical integration with content providers (e.g. Comcast/NBCU). The moment both Apple and Google embrace an interoperable messaging standard and include a native OS app, SMS will suffer a quick death. In the meantime, consumers will continue to be gouged. It's truly a shame that Stephenson's nightmares have not yet come true.