#1 New market disruption: competing on different attributes than the ones held dear by the incumbent’s best customers. Example windows versus iOS.
“This remains an incredibly elegant and powerful theory, and I fully subscribe to it. We are, in fact, seeing it in action with Windows – the incumbent – and the iPad and other tablets; new technology that is inferior on attributes that matter to Windows’ best customers, but superior on other attributes that matter to many others. (My belief in this theory is why I have been, to my own personal surprise, more sympathetic to Steve Ballmer – here and here – than most).” — @monkbent
#2 Low end disruption: i.e. integrated versus modular.
In a vertical – proprietary tech is usually the best in the beginning in but over time modular becomes good enough.
Once an industry moves to modular – money moves to whoever controls the performance defining subsystem.
“…the move to open modular architecture just happens over and over again. It happened in the personal computer. Although it didn’t kill Apple’s computer business, it relegated Apple to the status of a minor player. The iPod is a proprietary integrated product, although that is becoming quite modular. You can download your music from Amazon as easily as you can from iTunes. You also see modularity organized around the Android operating system that is growing much faster than the iPhone. So I worry that modularity will do its work on Apple.” — @claychristensen
Since Apple has been a consistent outlier – it’s not being disrupted by modular forces, people question the theory. One explanation that I find appealing is this: It’s who the buyer is. Modularization happens when the buyers are enterprises and the users are not the purchasers. In such a market, the value of ‘user experience’ is greatly diminished. On the other hand, in markets where the consumer is the user/buyer ‘UX’ rules. For examples mobile phones and BYOD. In such a market, there is no limit to quality of UX and consequently the integrated solution is much better than modular alternatives (for much much longer than otherwise? forever? IDK).
Another explanation for Apple is that it keeps changing the goal posts. It’s not just the components on the phone, but also the ecosystem. And then how that ties in with your desktop / laptop / car / house (all also made by Apple). So the integrated system is a much wider system and it will take longer for modularity to do its work. Note that this also appears to be Xiaomi’s strategy. Born in intense competition as it is…