In a follow-up to his earlier piece – What Clayton Christensen Got Wrong, Ben Thompson of Stratechery is on the offense again with another post titled – Obsoletive. In his new post Ben Thompson is reinforcing his theory that the low-end disruption only happens in the business to business market and not the consumer market.
First off, Ben Thompson highlighted that Christensen did acknowledge that he was wrong about the iPhone by pointing to the following article in the New Yorker (subscription needed):
One CEO who never asked for his help, despite his admiration for The Innovator’s Dilemma, was Steve Jobs, which was fortunate, because Christiansen’s most embarrassing prediction was that the iPhone would not succeed. Being a low-end guy, Christiansen saw it as a fancy cell phone; it was only later that he realized that it was also disruptive to laptops.
More importantly, Ben Thompson was not impressed with the explanation given by Clayton Chrstensen about why he got it wrong in the first place.
“It certainly is true that touch devices are disrupting laptops, and if you want to say that started with the iPhone, that’s fine,” Ben Thompson said. “However, I don’t think this is quite right: note that Christensen’s admission never does say what, exactly, happened to cell phones. Of course the easy answer is to say “The iPhone disrupted cell phones.” Except, at least to my reading, that kind of misses the point of what disruption is.”
Thompson again referenced the New Yorker article by Larissa MacFarquhar, which states:
In industry after industry, Christensen discovered, the new technologies that had brought the big, established companies to their knees weren’t better or more advanced – they were actually worse. The new products were low-end, dumb, shoddy, and in almost every way inferior. The customers of the big, established companies had no interest in them – why should they? They already had something better. But the new products were usually cheaper and easier to use, and so people or companies who were not rich or sophisticated enough for the old ones started buying the new ones, and there were so many more of the regular people than there were of the rich, sophisticated people who the companies making the new products prospered.
Ben Thompson concludes that:
Christensen’s theory of disruption remains an incredibly elegant and insightful framework for understanding why some companies – like Microsoft, to name the best example – decline. But it’s dramatically over-applied in technology. Most new products are simply better – stop calling them disruptive! – while the most revolutionary products – all of them, ever more personal versions of truly personal computers – are obsoletive. They are more expensive, more capable, and change the way we live.
And here is where I disagree with Ben Thompson.
I believe Clayton Christensen is spot on that the iPhone disrupted the notebook industry and the disruption of the cell phone industry is more by chance than designed. This is why many people underestimated the impact of the iPhone would have on the smartphone industry. To be a low end disruptive product, it had to be cheaper, dumb and shoddy. The iPhone was the opposite.
However, if you compare the iPhone with laptops, it totally fit the bill of a low-end disruptive technology. It’s cheaper and not as productive as laptops. The iPhone was created after Steve Jobs saw the potential of making a smartphone from their then iPad prototype. The iPad was meant to be the low price MacBook. And Steve Ballmer was right, no one would spend over $500 on a phone, but they would on a small mobile computer.
This essentially proves that the idea of the iPhone stems from Apple’s desire to disrupt the laptop industry with a cheaper product – supporting Clayton Christensen. And what we all know now, is that the difference between the original iPhone and the original iPad was 6.2 inches (9.7 inches – 3.5inches).
I also believe Apple was blindsided by the fact that people wanted to use their iPhone more as a mobile PC than a cell phone. By increasing the size of the screen, Samsung managed to gain consumers who were frustrated with poking around on a 3.5-inch screen smartphone.
Here is a video of Steve Jobs explaining what actually happened: