Disruption Theory Need Not Apply

The biggest challenge I see facing disruption theory is an understanding of when it applies vs. when it does not. Several posts lay the foundation for truth.

  1. Ben Thompson’s What Clay Christensen got wrong
  2. Jean-Louis Gassee’s Clayton Christensen becomes his own devil’s advocate.
  3. Disrupting Disruption Theory – by me.

A few weeks back, Horace Deidu and I had dinner and were discussing holes in the theory. That dinner led to he and I doing a podcast on the challenge of universal application of the theory. Jean-Louis Gasse re-opened this can of worms and, in a twitter conversation, Horace made an important point.

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Hence, my initial point. The greatest challenge to disruption theory is in understanding when it is applicable and when it is not. This single point will lead many to make false assumptions based on the academics of the theory and could have massive unintended consequences. For example, companies can go out of business chasing the wrong strategy.

The most glaring flaw today comes to Apple. We see disruption theory get misapplied to Apple by folks without the domain or market knowledge to understand it does not apply to them. I addressed this point in an article on why Apple is immune to disruption theory. In a fascinating and shining example of the misapplication of disruption theory, many fell into the trap in applying the theory to Apple when, in reality, it should have been applied to Samsung.

At a fundamental level I strongly believe disruption theory needs to also include an element of behavioral science. Here again, behavioral science need not be applied in all case studies, like the original hard disk drive study in Clayton Christensen’s book “The Innovator’s Dilemma”, but it absolutely needs to be applied when the consumer market is in play. One of the greatest flaws with the theory is how it handles buyers of a more emotional nature than a pragmatic one. The billions of individuals who make up the consumer market have very diverse and nuanced processes that impact their decisions on making a tech purchase. Perhaps my favorite example from this came from a post where I wrote “Familiarity is just as valuable a feature to some consumers as cutting-edge specs are to others“. Getting in the mind of consumers is hard work and not everyone has the ability to do it. But those who can have an edge in knowing how to apply disruption theory properly in pure consumer markets.

Like all theories, there is an evolutionary process. What has been lacking, until late, has been a more open and approachable discussion from an academic sense on disruption theory. I hope the many smart folks writing publicly will continue to play a role in the refining of disruption theory and pushing it forward in both academia and every day applications. It is still a useful and valuable theory. I used to warn investors more than two years ago that Samsung wasn’t in a sustainable position and Apple was. It serves a purpose but wisdom is knowing when it applies and when it does not.

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Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

90 thoughts on “Disruption Theory Need Not Apply”

  1. I have been influenced by Karl Popper on the subject of what is science. As I understand it, any theory is not “truth” rather a form of conjecture. Great theories have great utility. But many OD the greatest theories we know about (special and general relativity, quantum mechanics and many others) are all known to have limits beyond which their utility diminishes. This is another way of framing your point about knowing when to/not apply.

    At the risk of showing my ignorance about disruption theory, I unspdwrstand it to propose that in any robust market, commoditization creeps in and eventually disrupts the initial market supplier beneficiary. I can see how in the pc market (MS DOS and Windows) this looks to have taken place. Yet Apple has survived and even thrived in this same market(?). It is apparently taking a disproportionate amount of profit relative to others and has done this for many years, and gives no sign that this will change. How does Clayton explain this? I know I can think of several reasons, but does disruption theory encapsulate and acknowledge these “excepualizing” parameters?

    I recall several years ago reading a games theory thesis that examined how a small entrant could oust a well established dominate player (sorry I do not remember the specific citation). I also recall that the authors of the “Blue Ocean” strategy book examined how a firm could carve out a sustainable competitive position in a “common” market context. Does Clayton’s theory incorporate these perspectives as well?

    The other critical lesson I got from Popper is it only takes a single example to show a theory’s limitations. Your statement about when to/not to is a great way to capture this thought as well.

    1. I have vague intimations of ideas that inhabit the same zip code as yours, i.e. Karl Popper and refutability. Whenever I hear statements like “the theory is correct but you should know when to apply it”, I start getting fidgety. I am not saying that Disruption Theory is thus hogwash, but the narrower its domain of applicability the less it is a theory (though not in the sense that creationists use it to deny evolution) and the more it is a narrative of a very special case.

      Ben has rightly referred to “buyers of a more emotional nature” who upend the ordained path to commoditization. Once consumers invest their personalities and identities in a given product, commoditization grinds to a halt at least for the higher end of that product’s price range. This has happened with cars, houses, clothes, jewelry and accessories, you name it. It has also happened to PCs and now, smart phones.

      1. All hypotheses in the natural world begin with a statement of facts (observations) and assumptions (range of applicability). When experimentally proven correct, and especially when it can also make predictions (most especially unforeseen predictions), then the hypothesis is elevated to theory. When a Theory is so broadly applicable that it’s believed to be at the most fundamental level, it gets elevated to the status of Law.

        All it takes is one ugly fact to kill a beautiful theory. Even Laws have required modification for the same reason.

        So yes, you should not get fidgety when you hear “you should know when to apply…”, that’s just a check to see if the theory’s assumptions are applicable to the situation at hand.

        1. I get fidgety but don’t suffer anything near a grand mal. Used once in an argument, “you should know when to apply …” is a marker for honest, careful thinkers. Used repeatedly, then it’s a marker for sophists and sea lawyers. So yes, be vigilant (and maybe fidgety as a result) the first time it pops up in a debate. And no, the author has not resorted to it repeatedly in the article and the ensuing comment threads.

          1. Where I get fidgety is with any theory not of the natural world. That is, anything involving peoples emotions and perceptions. Not that those aren’t valuable, just that they are too complex to be theorized with any rigor. The assumptions don’t hold well enough.

    2. I’m with you Mark, I don’t pretend to know much about disruption theory, however … As you mention Apple isn’t being disrupted right now and neither do I see much disruption in the PC market over the last 20 years. Specifically MS has made (and continues to make) fantastic margins on its Windows and Office software and as for PC hardware sellers of the last 20 years all I see is a race to the bottom with different companies all basically competing on price and rising or falling as a result.

      I accept that Windows/Office might well be being disrupted right now (by Mobile in the consumer market and Cloud/Chrome/Mobile in the enterprise market). However what value would Disruption theory have been to me if I was trying to predict Microsoft’s fortunes in 1995 ?

    3. You’re right about a “theory” being a form of conjecture. It’s a very informed form though…

      When you cite QM and Relativity, they have both been proven that within the realm of everyday experience, they reduce to Newtonian Mechanics. That is, they are both a superset of Newton’s theories. Relativity better explains the very massive and/or the very fast, and QM the very small. Relativity is purely deterministic (cause leads to effect) and QM is statistical, though somehow influenced by determinism.

      Both theories are valid and have never had an experiment performed that proves them wrong. The embarrassment is that they are completely at odds with each other and cannot be reconciled (yet). We need two theories to explain the universe. Each with their own sets of assumptions.

  2. I’m grateful that you brought this topic up yet again, especially after your podcast with Horace Dediu. Since your post is balanced as always, I look forward to the great discussions that we will most certainly have.

    My position is that Clay’s theories do apply even to Apple, but the vertical axis on the disruption chart should not be “performance” but instead should be “the jobs-to-be-done”. This axis can and should incorporate emotions if appropriate. I think that the difficulty in doing this is what Horace means by requiring domain expertise.

    To understand the immense difficulty of a jobs-to-be-done analysis, all you have to do is refer to the classic milkshake example that Clay frequently brings up. That was totally non-intuitive and bizzare for most of us. It was also emotional.

    Also in whatever Apple touches, the jobs-to-be-done changes rapidly. The jobs-to-be-done of a iPhone has changed immensely, even after its introduction. Framing it as a small PC instead of a phone doesn’t really help either because you can do so much more now than a PC.

    I hope I’ve illustrated the difficulty of a jobs-to-be-done analysis, even for milkshakes, and much more so for tech.

    My position is that if an adequate jobs-to-be-done analysis can be performed, then the theory will apply to Apple, and I think it will also illustrate how Apple escapes.

    1. I agree with you, and I will go further to say that not only Apple will be disrupted primarily in the cloud and all services that comes with it, but they have already seen some form of disruption mainly in Europe which they were able to compensate with their growth in China. Also up until last year there was no company that positions themselves to disrupt Apple’s business model which is changing now with new entrant such as Xiaomi, One+One and even Nokia with their new Tablet

      the discussion about disruption Theory with regard to Apple was premature,
      giving Google recent move with Android the next 5 year will be the determine factor.

      1. The idea that it just needs a little more time regarding Apple’s disruption has been used for over 30 years and it hasn’t panned out yet.

        1. First of all disruption doesn’t necessarily mean that the company will be dead,

          Apple has been disrupted many time already, primarily from Microsoft and Office.

          i was referring to the IPhone which is facing the same type of disruption as was the Mac.

          1. Disruption entails a change of business model by the encumbant. And the Mac was never disrupted as it was never the market share leader. Nor can many disruption theorists accurately explain why the Mac is resurging and gaining share.

          2. using that same logic one can argue that Windows isn’t seeing any disruption from mobile as well since their business model has not change.

            i can argue that when it come to the Mac the pricing is more competitive relative to the spec right unlike in the past when they rely on design for value proposition. and also that the IPhone revolution was the wave that lift all boat when it come to Apple.

          3. Sure it is, Microsoft has shifted from selling windows to giving it away for free. Same with office. They are no longer selling software as a primary business model but they have shifted to services.

          4. The Mac is also very interesting.

            I remember Steve Jobs preaching the new JTBD for PCs as a hub for your digital life. This came at a time when PCs were overshooting in performance for regular productivity and Internet usage. This new JTBD made photo and video editing a requirement even for consumer PCs, greatly raising the bar for “good-enough” performance.

            Same for the MacBook Air. Steve Jobs changed the tech-spec equation from GHz to battery-life and “thinness”. Performance had become “good-enough” so Jobs preached a new JTBD in the form of all-day battery life and ultra-portability. The laptops that had been “good-enough” for the previous JTBD were now woefully inadequate.

            Just when technology reaches the “good-enough” stage, Apple likes to change the basis of competition, introduce a new JTBD which makes the current products look totally inadequate and far from “good-enough”.

      2. There are some aspects of the new entrants that are actually quite new from a business model perspective. For example, it seems like Xiaomi aims to profits from services rather than from hardware. In that sense, if successful, the disruptive potential may be higher than other low cost entrants that preceded it.

        The question is, will Xiaomi affect Apple or will it affect Samsung? Right now, it looks like Samsung is taking all the damage. Apple seems, at least right now, to be more immune.

        The question then is, will Apple eventually be affected or is Apple somehow immune? This, I think is the point of this post and discussion.

        I think that current evidence points to Apple being somewhat more immune to disruptive forces (the reasons for which is the topic of Ben’s post). Samsung has shown that it is quite susceptible.

        I can’t say whether Apple will be disrupted or not, but the current resilience to disruption is amazing and unless further studies suggest otherwise, I would extrapolate Apple’s success out a further 10 years or so, simply for the lack of a better understanding.

        I would hesitate to say whether cloud services or anything else would disrupt Apple, simply because we do not really know why they have been so resilient thus far.

        1. a lot of evidence point to a different dynamic (ie)

          Cheap smartphone is destroying the IPod business.
          Big Phone, Chromebook, and even cheaper Tablet are disrupting the IPad Growth potential.
          Streaming service such as Netflix, Spotify and YouTube are destroying the ITune Media Business.
          Free software such as Google Doc has force Apple to stop charging consumers for theirs.
          Apple doesn’t have a single software Service that one can say is the best right now

          the IPhone which is their strongest and last line of defense have seen huge growth in China while under performing in other part of the world like Europe and north America and Android is getting stronger and stronger

          1. Yes, of course a lot things are changing in the tech world.

            How these changes will affect the power and financials of each company is less clear, and that is what Disruption Theory aims to understand.

            At least for now, Apple is doing well. Will that change? My understanding of the theory and of the current competitive landscape suggests that the examples that you bring up are either insignificant or already taken care of under Apple’s current strategic direction.

          2. “Cheap smartphone is destroying the IPod business.”

            You are a little late to be beating that drum. Apple moved on from the iPod in 2007. It has gone from selling 10 million units quarterly of a product, at its height, to selling 40 million quarterly at a much higher ASP — products which tie more closely into new aspects of its ecosystem that are still growing (Apps and iCloud).

            Apple helped “destroy” the iPod business. That is precisely one of the ways it is resilient against disruption. How are the PC makers that produced millions of netbooks doing? Are they producing 4 times as many more profitable “UltraBooks”? Have their profits grown like Apple’s?

            You are falling into the disruption trap that many pundits fall into. Cheap smartphones may have “disrupted” the iPod, but Apple is no longer “in” that business. Cheap smartphones don’t disrupt the iPhone. Disruption is asymmetric. Rather, iPhones and iPads disrupt the PC industry.

          3. Apple never moved from the IPod business, you are not paying attention,
            up until last year the IPod touch was still a big business.

            When I said that cheap smartphone are destroying the IPod’s business, I was referring to a certain market primarily in developing countries, such as Brasil where those who would normally buy an iPod touch as a Pocket computer now buy a Moto G.

            the things is if you look at Apple entire business, you will notice that a lot of them are facing real challenge for growth except maybe the IPhone, and a lot of these challenge play to their weakness, even the Mac sudden growth is not a real indication of the category getting stronger yet.

            Meanwhile, what do you think will happen if the Apple watch does not become the giant success that many of you is anticipated, when the whole enterprise is increasingly becoming dependent off of the success of the iPhone, which is facing a lot of challenge and even more so in the future.

            Those are the questions that one need to ask, and i’m not sold yet on the Apple Watch becoming a big business starting next year.

      3. It’s all about devices and perceptions.

        I just got a call from an iPad user inquiring if her iPad would work in Germany. I couldn’t even figure out what “would work” meant, something about showing pictures and “messages” (couldn’t work out if it was emails or something else). In the end, I had to dial it down to “whatever works when you’re not at home will work too, country doesn’t make any difference as long as you log in to wifi.” Which opened the “logging in to wifi” pandora box, we quilckly gave up.

        Those are the kind of customers buying iPads. They want something socially valuable, use 1% of what any tablet can do, but they need the iPad’s shiny and the social value.

        Features don’t matter, jobs-to-be done is “show pictures” and make me look like I made it and am actualized. If someone wants to compete, they should focus on materials (shouldn’t be hard, aluminium never has been a luxury one), and branding. If I were Apple, I’d do a Vuitton edition in leather with logos all over, a Nike edition, and of course a BMW edition. Should cover most demographics. May lack something for teens or seniors.

    2. While I of course love the JTBD analogy and use it as a basis for quite a lot of my work, one thing I’m finding is it becomes a bit harder to detail with a general purpose computer like a smartphone. On the basis that the jobs are so vast. Let’s just use China as an example.

      We know one of the major jobs to be done is status. Knowing that Chinese consumer buy iPhones (or other luxury goods) due to a psychological and social perception of what it means to own one of these products, then it should be relatively straight forward for another brand to come in and compete right? This is a topic Benedict and I have been talking about. Why is it so hard for an Android vendor to compete and sustain their competitive advantage with Apple in premium? You think if they had similarly build quality, maybe a brand status, that they could right? However, we have not yet seen it. We have not yet seen it because Android is a modular platform and therefore the hardware design alone is not the answer.

      We know the job to be done of the iPhone in China yet only Apple seems to accomplish it. There are fascinating dynamics about this which keep them isolated.

      But the main way I view this, and this includes elements of the JTBD if you dissect it, is that every market, even commoditized ones, have sustainable premium players. You can buy shoes for $10 yet companies successfully sell them for $300. You can buy a car for $15,000 yet people successfully sell them for $200,000. While the JTBD dynamics have many similarities as to why premium segments always exist, what we are dealing with is a fundamental difference in scale. We know the premium player is never the volume seller but the profit leader. However the scale Apple can achieve using this same strategy is significantly larger than that of food, clothes, cars, etc.

      More importantly, those premium players don’t have to change their business model (which is a fundamental result of disruption) even though someone sells a similar product for less money. Understanding the dynamics of JTBD in premium markets is a bit tougher and why I say it so much more nuanced and difficult than a basic JTBD analysis.

      Lot’s more I can dive into but I’ll leave it there for now.

      1. isn’t Xiaomi doing to the same thing with their brand in China as with Apple,
        their’re getting stronger and stronger.
        to say that only Apple can sustain a premium i think is misleading

        1. Incorrect, all buying research I have seen on Xiaomi consumers is that iPhones are still more aspirational than Xiaomi’s. Xiaomi is not considered a premium player there and I’m seeing mounting evidence that Xiaomi is a stepping stone to iPhones for a healthy percent of the growing middle class in China.

          1. i disagree

            Xiaomi is building a premium integrated brand that will be able to compete head on with Apple in China despite being a statup which doesn’t spend any money in marketing as Apple

      2. “We know the premium player is never the volume seller but the profit leader”

        Except in mobile, Apple *is* a volume seller. Which means that we can’t exactly compare their position to BMWs or Gucci handbags.

        For handbags and cars, etc, the premium products are often much more expensive than the commoditized products, and sold to a very small and well-to-do clientele.

        Setting aside the forthcoming stainless steel and gold versions of Apple’s watch, with Apple, the premium product is just modestly more expensive than the commoditized version, and sold to a mass market clientele.

        Ben, what are some other aspirational brands that are strictly comparable to Apple’s “affordable premium” mass market status?

        1. Yes I pointed that out in a number of other responses in this thread, that Apple is unique in that they can play at premium and at scale. An ecosystem of a billion people, is not only not small, but also able to impact industry shaping change.

          There is no scale like mobile so it is hard to come up with comparable examples with even remotely similar scale. Actually it may just simply be that tech in general has unparalleled scale.

          1. So Apple is sui generis. And thus very easily misunderstood. A luxury brand that doesn’t feel like a luxury brand, because it’s too big and ubiquitous, so people keep comparing it to non-premium brands and then getting confused.

      3. Yes, I totally agree.

        JTBD analysis of Apple’s success is almost too difficult to the point that it may make Disruption Theory almost inapplicable, even if the theory itself remains sound.

        Two thoughts;


        Companies that assume the JTBD to be a simple spec sheet, seem to be more predictably disrupted. Inversely, companies with a convoluted, complex and emotional JTBD proposition are less so. This may be due to inability to replicate the leader due to the lack of vertical integration. However, given the difficulty in understanding the JTBD, it could equally be that the imitators have failed to understand the JTBD and as a result, the imitations have only been skin deep.

        That is to say, vertical integration is extremely important but I would not discount Apple’s deep, deep understanding of the market, the customers and the future direction of tech (which is similar to understanding the JTBD).


        Although a lot of focus is on Apple’s strengths in UX (as a result of integration) and branding, I often feel that the role of Apple’s innovation is overly deemphasized. I suspect that understanding how Apple combines industry-leading innovation with UX and branding, and understanding the synergies that they have, will help to tell us why they can scale so much better than a premium vendor in other markets.

        The premium vendors in food, clothes, cars, etc. lack scale. They are never the volume seller. However, Apple manages to combine premium with scale. My hypothesis is that this is possible only in tech, and only because the JTBD changes so rapidly. As a result, you don’t reach the “good enough” level. For example, just as Android thought they caught up with Apple in UI smoothness, Apple has added a significant new JTDB for smartphones as a secure ID, linked to payments.

        Finally, I have to add that given the complexity of understanding the JTBD, the deep and thorough analyses that you and your colleagues provide are increasingly valuable. Thank you for this.

  3. The most important thing to understand about Apple is that it has been two completely different companies throughout its history: Apple with Steve Jobs, and Apple without Steve Jobs.

    There are some companies that can roll along through a succession of leaders without much difference. There are some that are extremely dependent upon the vision of their founders. Apple is the latter.

    They’re not going to disappear overnight, but their products have already stalled. They’re treading water. They’ll be able to hold on for quite some time due to inertia, but at some point someone will come along with a smartphone that beats the iPhone, or the smartphone market will change, and that will be it.

    They’ve got one product, but that one product isn’t something like Coca-Cola that can keep chugging along for a hundred years.

    I’m an iPhone user. I have an iPhone 6. I can feel the product stagnating. I can see where everything that was in the pipeline before Jobs left has started to run out. The iPhone 6 is entirely a “me too” product. The only thing new it brings to the table is a larger screen. Its construction feels flimsier and less “premium” than previous iPhones. It has Bluetooth and battery life issues. iOS is, and has been, terrible to look at since the iOS7 overhaul.

    As long as Android remains its chief competitor, Apple will be able to hang in there. At least until someone mods Android in a way that offers the same ease of use offered by iOS. Apple is not progressing, and eventually someone will catch up.

    That’s without even mentioning the steep drop in iPad sales this year. The iPhone relies heavily on perception. When consumers no longer perceive it to be a superior product, worth a higher price tag, it will be in danger. It’s heading that way. As a user who has watched it develop over time, I can smell it. Somebody is going to come along and eat their lunch. RIP Steve.

    1. Count me skeptical in your theory.

      The Apple is doom meme has been around and will be around, You are not the first neither will you be the last.

      Btw familiarity breeds contempt, why? because you are used to the specs of the iPhone that’s why you feel it is stagnating.

    2. “That’s without even mentioning the steep drop in iPad sales this year.”

      It’s more accurate to say iPad sales have levelled off year-over-year, to around the 70 million per year mark (which makes the iPad alone the single largest PC maker in the world, beating Lenovo). The actual annual decline in iPad sales from 2013 to 2014 (fiscal year) was around four percent, something like that, I did the math a while ago. Anyway, hardly a “steep drop”. I expect we’ll see some iPad growth through 2015, but it is also possible that the iPad will chug along for a while around that 70 million per year mark (slightly above in 2013, slightly below in 2014).

      1. I read an article yesterday that stated the drop in iPad sales at 14%. Maybe you know better, but if you’re doing the math yourself I’ll take their word for it.

        1. That was likely a quarter to quarter comparison. Don’t take anyone’s word for it. Add up the iPad sales in fiscal 2013, then add them up in fiscal 2014, then figure the percentage difference. It’s fairly simple, and all the info is public. The decline annually was around 4 percent (4.3-ish?). I’ll even help you out. Fiscal 2013 sales were 71 million. Fiscal 2014 sales were 68 million. Think you can take it from there?

    3. So much I could say, but I’ll make a simple point. If you have read much of what I wrote before about the dynamics of integrated vs. modular business models. Elements of disruption theory necessitate a need to understand these dynamics to a degree.

      What Android has, using the modular approach, is the same as what Microsoft had. They achieve market share. The mis-use of disruption theory in this case is to make the assumption that gaining the overall market share equals winning. That is a fundamentally flawed assumption. Apple is not and will not be disrupted because they don’t have the majority market share. There is ALWAYS a place in every market for a premium differentiated player. One where the job to be done includes things like simplicity, familiarity, status, fashion, etc., the list can go on. To believe Apple will be disrupted is to believe that Toyota will disrupt Porsche, or that Levi’s will disrupt Paper denim, or that Rockport will disrupt Prada. The difference in all those examples I just mentioned is scale. While there are always opportunities for premium players, even in commoditized markets, not many of those premium players achieve the kind of massive scale Apple has. It is the exact same strategy with the exact same dynamics, but with much larger scale.

      The fundamental result of disruption is the disrupted must change their business model. Yet look at fashion, just because you can buy jeans for $15 doesn’t mean those who sell them for $300 have to change their business model. They may not achieve the same scale but the still make loads of money. This is the exact same dynamic for Apple. They will likely increase their ecosystem footprint to 1 billion devices. Maybe they don’t grow beyond that but it will be hugely popular and likely hugely loyal. Like Porsche, high-end fashion brands, etc., they focus on profit share not market share. The difference is, the market they play in, their TAM using this strategy is significantly larger than care or fashion brands.

      When someone can prove to me Apple is changing or has to change their business model then I’ll listen to their points about Apple being disrupted.

      1. Seems like a common theme among those that promote the doom or disruption theories re: Apple is a strong belief that Apple is not a premium differentiated player. By making this first (and fundamental) mistake, the rest of their analysis is flawed.

      2. Ben only an Idiot will believe that market share alone will disrupt Apple

        But new business model around product specialization for half the price can,
        Company such as Xiaomi, One+One or even the new Nokia or many future one can disrupt Apple
        new form of hardware and service integration such as cloud service can disrupt Apple

        the IPhone is not longer a premium product compare to a High End Android Phone, their Brand and their install base are the biggest asset right now and a lot of that could change in the Future.

      3. “Disruption” has clearly become an extremely overused buzzword. My understanding of the term is that it’s not a matter of Toyota out-competing BMW in the car market, but rather something coming along that fundamentally changes cars, or replaces them, to the point where every car company has to adjust.

        If that’s the definition, companies fail all the time for reasons other than being “disrupted”. And my point (in the simplest sense) is that Apple without Steve Jobs is like the Rolling Stones without Mick Jagger. Jobs had a very specific vision of computing, that can be seen consistently throughout all of the products he personally oversaw. That vision never really worked until the iPhone. The Mac failed miserably to achieve what he wanted, and the company was on the verge of ceasing to exist when he was brought back.

        In Apple’s case, the question is whether they can maintain their status as a “premium differentiated player”. I have my doubts. If they stay where they are, and their competitors improve over time, iPhones will no longer be seen as a “premium differentiated” product, but rather an overpriced mediocrity. That’s what I sense happening. I’m not saying we’re there yet. But I can see the signs. I’m also not predicting a time table for this happening. Just the trajectory.

        The iWatch has been met by a collective yawn. So has Google Glass. But Google has its hands in a million revenue streams. Apple only really has one. That’s why they’re in danger.

        1. “The Mac failed miserably to achieve what he wanted, and the company was on the verge of ceasing to exist when he was brought back.”

          You may be right that his complete vision for computing in general wasn’t really fulfilled until the iPhone (still isn’t, as visionary as he was). However, I would argue that the Mac has achieved all he wanted for it. It was precisely because he didn’t get his way with the Mac that he was ousted and Apple went downhill. He wanted Apple to go all-in on the Mac and go completely GUI, etc. He was also for more open network protocols and formats, rather than completely proprietary ones. Hence he built NeXT and web tools when he was away.

          Instead, Apple continued with cash cows and more proprietary technologies until he did come back — at which point he scrapped everything else and had Apple concentrate on only the Mac. At that point, it did then begin to achieve what he wanted.

          …until today, when it is the most profitable computer on the planet, the best value, the easiest to use and maintain, the most aspirational, the one of choice for many many use cases, etc.

          And at least half of that is down to Tim Cook.

    4. In my view, even more than Disruption Theory itself, Clayton Christensen’s greatest contribution is the dismissal of the “stupid manager” theories. His ideas on disruption and even the more recent “Capitalist’s Dilemma” center around the idea that even the wisest minds educated at the most prestigious institutions are systematically biased towards making the wrong long-term decisions.

      In light of this, I think that it is not very constructive to simply divide into “with Steve Jobs” and “without Steve Jobs”, without diving deeper into what difference it actually makes.

      One thing. Pixar seems to be doing just fine without Steve Jobs.

      1. Enough has been written about Steve Jobs that I don’t think it all needs to be repeated here. The way I summarized it is that he had a very specific vision about computing, and it drove all of the decisions he made when he was in charge.

        That vision, by the way, was not for Apple to be a “premium lifestyle brand”. I think he embraced that side of things reluctantly. His vision was to make computing simple, accessible, and fun for the average, non-technical user. He didn’t want Apple to be like an exclusive, fine-dining restaurant where all the cool people hang out. He WANTED to be McDonald’s. The problem is that his vision resulted in products that were more expensive than the competition. So you had to pay for simplicity and fun. Which many people were finally willing to do when the iPhone came along. The Mac was less successful (especially initially) because it didn’t fully deliver on that promise. It couldn’t deliver on that promise because it was still trying to be a fully-featured PC.

        Jobs’s approach provides a lot of object lessons when it comes to technology. Simplicity for the end user often requires complexity on the back end, and layers of abstraction that are difficult to balance properly. So you pay more for a device that makes certain things easier on you, but by design must have limited functionality relative to a standard PC. That’s why the smartphone proved to the perfect platform for Apple.

        It’s also why the iPad (which Jobs had his own doubts about) has proved to be a less perfect product. For many people, its limitations are frustrating. I know personally, and hear anecdotally all the time, that a lot of people have ended up passing their iPads down as toys to their kids, and have not bought new ones for themselves.

        You still need a PC for productivity and content creation. Or you could say, PCs are for grown-ups.

          1. Without Jobs, I would describe it as a lack of innovation and direction, a slow decline in the quality of their products, and lack of a cohesive vision. Stagnation, and dissolution of the brand identity.

            These are long term trends that have only begun to be seen in the current period, but they were on full display during Jobs’s first absence from the company.

          2. So are you simply saying that Tim Cook is totally incompetent as a CEO and that Steve Jobs made a terrible decision as to who should succeed him?

          3. If I understand you correctly, you are either simply saying that Tim Cook is a terribly incompetent CEO, or that without Steve Jobs, Apple will collapse regardless of who the succeeding CEO is.

            I would be more interested in why you think that might be the case. Clayton Christensen’s theories often discuss the reasons why very intelligent people make the wrong long-term decisions. I would like to hear what you think made Tim Cook incompetent.

  4. Part of the issue is that, though the theory has gained attention and popularity, the perception of what actually constitutes “disruption” is lacking. Just like with the term “innovation”. “Innovation” is overused and poorly applied to every change in a product’s color or screen-size. So, too, the term “Disruption” seems to be overused and applied to every form of simple “competition”.

    So, besides the fact that Apple has taken steps to guard against disruption and that it tries to be the one to disrupt itself, the question might be: what form of competition against Apple would actually form some kind of “Disruption”. Because we aint seen it. Samsung being a “fast-follower”, or putting out more and cheaper models doesn’t a “Disrupter” make. It’s a competitor. And not a very good one.

    All these pundits claiming every company is going to come along and “Disrupt” Apple, really need to delve a little deeper into Disruption. By the same token, Apple hasn’t “Disrupted” Samsung by making a phone with a larger screen. It has simply competed well. Disruption seems to be more about business models, relationships, and something fundamental about the product that makes it take off. And “Disruption” is usually Asymmetric.

    The “Disruptive” things that Apple has done might include:

    • iTunes — disrupting the Walkman, because it was no longer necessary to buy CDs; music could be bought easily and legally online, by the song.

    • integration of products so that value was added, and paid for, within a hardware purchase

    • making a mobile OS from a desktop OS and not a phone OS

    • changing the expectation of what a mobile device is (touch UI and apps)

    • Apple’s relationship with carriers (which still seems rather unique)

    • buying equipment for assembly lines, or means to produce certain technologies

    • looking at smartWatches with a Fashion vs Tech lens (particularly if expensive editions can be kept for years while upgrading the internal CoC, as conjecture would indicate).

    • Secure and simple use of NFC for payments

    Google was disruptive to MS in making the mobile OS for OEMs free. But, going forward, one wonders if pundits would better spend their time using every other article to warn of possible “Disruption” to Google rather than Apple. Google needs to find a way to better profit from its traditional ad and search businesses in the new areas of Mobile and the App Economy. Someone else, like Facebook, could come along and eat its lunch.

    As Ben Thompson (I think it was, or maybe Horace Dediu) has spoken of, putting software into things or businesses in new ways could become the real disruptive force. Vis-a-vis, Uber putting software into the taxi business, Apple putting it into the health and sports industries…etc. This is a lot different than simply increasing specs on a spec list.

    Thus, making a real solid platform on which developers can innovate and disrupt in all sorts of different industries, and the products and tools with which users love to use those developer innovations, is a real strength that Apple has to guard against Disruption. Apple can pivot and incorporate new technologies and user preferences as they come along, so these in themselves won’t disrupt Apple. But making new technologies usable and finding a good business model for them is something that others will find difficult to do to disrupt Apple. That’s not as easy as pundits who undervalue Apple would make it out to be.

    1. this the problem with many of these analysis, they are talking about disruption when there was no company that position themselves to disrupt Apple except maybe Xiaomi which up to this point has been very successful as disrupting not only Samsung but Apple as well in China.

      no one ever said that it will happen in less than 7 years

      Sometimes I wonder if these analysts really understand Disruption theory itself and how it affect a company, or are just blinded by their love for Apple

      1. With all due respect, your statements sometimes sound to me as if they are blinded by dislike for Apple.
        That said, the counterpoints you offer up are useful.

        1. that maybe because you are Blind by your Love for Apple

          my arguments is not against Apple and never was hence not drinking the Apple cool aid doesn’t mean that i dislike them

      2. Well, aren’t you the one saying Apple is getting or going to get “disrupted” in this or that area by this or that company? How is your “analysis” any different from all the pundits?

        But you may have something there… There are few if any cases of competing companies “positioning themselves to disrupt Apple.” Perhaps because this is rather difficult to do, no? Because, as the article suggests, Apple is rather resilient and has made itself rather immune to disruption. Horace suggests that is a conscious strategy at Apple and is rather baked into Apple’s DNA, culture and processes.

        We shall see how disruptive ApplePay is, for example. Again, classic earmarks of disruption: something that is easy and simple with great usability that provides a new way of doing something; it may start out with less overall utility/capability/features than the incumbent product/method; but it provides one killer feature (privacy in this case), and becomes something that Apple builds up into a real game changer that sets the bar, once again.

        Contrast that with competition from the likes of Samsung that typically over-serves because all it can do is provide ever more specs and features that are less usable and less reliable. Apple is blasted for having less features and specs; and yet, Apple’s “less” is always more.

        1. In my opinion Apple Pay will be as successful as IBeacon, a great service that many consumer are not eager to use in place of their credit card yet.

          many of Apple business is being disrupted as we speak right now,

          Look at my post above

          The only reason you do not notice it is because of the performance of the iPhone in China, a growing market.

  5. @Ben Bajarin

    How did you come up with the idea that disruption theory does not Apply to Apple, what make you think that Apple cannot be disrupt ?

    isn’t that a form a biases due to the simple fact that you love Apple?

    1. Kenny you REALLY need to accept that as Ben has explained several times, he has access to volumes of data gathered from the industry and his statements are based on the data. You’ve ignored that fact repeatedly and it’s like saying water freezes not because it’s cold but because it loves to freeze.

      1. Data rarely tell when a company is in the process of being disrupted, if that was the case every one of them would have simply follow their internal data and never get disrupted.

        it’s vision and good timing that help company escape disruption

        many of these analyst are simply assuming that since Samsung could not disrupt Apple therefore it can’t happen, which means that the theory does not apply to Apple without Recognize that Samsung never positioned themselves as a disrupter against Apple they were just a competitor

        1. I don’t know if that’s correct but it’s better than saying “isn’t that a form a biases due to the simple fact that you love Apple?” That kind of accusation is like telling a mathematician that 2 plus 2 does not equal 4. You just make yourself look like an ignorant dummy.

          1. the product one like more often than not will define his logic and his approach to the market

            that’s a form of Natural biases, and there is nothing wrong with that except when it is used as a fact.

          2. As I said, everyone has a degree of bias sure, including you which clouds some of your reasoning. The way around it, and that I have to do as an analyst who covers all platforms for executives to give them insight, is to do full SWAT analysis of each which I do regularly. Which is why you have seen me write favorably of Google, and Microsoft and others often but it comes with an understanding their SWAT is each unique to each has to analyzed very different from each other in order to be useful for the company who desires the insight.

            I also constructively criticize which is an essential point of any good analysis.

          3. I agree
            just because i disagree with you analysis sometime doesn’t mean that i do not respect you work

          4. “the product one love more often than not will define his logic and his approach to the market”

            You know, it is just as easily explained in reverse, one’s logic shapes what one loves. One may find a product easier to love because it fits easily within their logic and world view.

            The difficulty, when one seriously starts trying to parse this out is figuring out which is the cause and which is the effect. Or maybe it just isn’t all that linear.


          5. you absolutely right
            The problem is when that said love becomes a passion that makes you dismissive even blind to everything that is happening around you.

    2. You have read enough of my content to know I analyze all platforms equally despite the fact that I am primarily a mac and iPhone user. I have and use regularly many Android products and Windows products to keep a grip on the offerings of all of them.

      But as you also know, I do a tremendous amount of research and study of this industry and the markets that make them up. It is one of the reason I am brought in frequently to advise the executive council of many companies who make products that make up this industry and including many who compete with Apple.

      I’ll offer this as an observation on existing examples in the market place. Disruption theory is mis-used primarily because people believe that a company is disrupted (or doomed) when they don’t achieve market share. So because Apple is not going to the market share platform leader in mobile, therefore they are in a weak position. Nothing could be farther from the truth. These examples are comparable to use.

      You can buy jeans for $10 but yet companies still successfully sell them for $300. You can buy a car for $15,000 yet companies still sell them for hundreds of thousands. You can buy a McDonalds hamburger for $1 yet restaurants successfully sell them for $15. You can buy shoes for $10 yet people successfully sell them for $300.

      In all of these few examples of many, the lower price player gets more share of overall sales, but makes less profit. They go for scale not margins. Apple is in a similar position, only the major difference is the kind of scale they can achieve thanks to the iPhone. Premium players in commoditized markets generally sell millions where Apple sells’s hundreds of millions of iPhones.

      Those are the same dynamics that never leave, do not go away, in long standing consumer commoditized markets. Premium players always exist, and always make more profit than commoditized ones. But they rarely achieve scale. That is the difference that Apple has over the other premium examples in commoditized markets.

      So it has nothing to do with my feelings for Apple but all about tried and true dynamics we can use from other markets that tell us Apple will be fine. Until someone proves to me Apple must change their business model, which is the result of disruption, I’ll keep my conviction Apple is immune to it.

      1. Ben you cannot compare a technology company to a clothing or a Burger business because of the fact technology and the Job to be done evolve all the time,

        A Jeans is still the same Jeans even after century while computer is not

        you cannot sustain a technology business using the same thinking as with a Bugger company

        Here is my point to you Ben

        Cheap smartphone is destroying the IPod business.

        Big Phone, Chromebook, and even cheaper Tablet are disrupting the IPad Growth potential.

        Streaming service such as Netflix, Spotify and YouTube are destroying the ITune Media Business

        Free software such as Google Doc has force Apple to stop charging consumers for theirs.

        the IPhone which is their strongest and last line of defense have seen huge growth in China while under performing in other part of the world like Europe and north America and Android is getting stronger and stronger

        Apple doesn’t have a single software Service that one can say is the best right now

        having said all of that what how can you say that disruption theory does not apply to Apple?

        1. This is where we disagree. The fundamentals of the mindset of the consumer are the same which sustain premium in the categories I mentioned and with technology. To miss this point will be mistake.

          We can absolutely use the comparable I mentioned because the consumers are the same and the nuances that make up they why behind the buying process are consistent.

          I fully understand this is hard for you to see, it is hard for many to see, but the alternate arguments simply do not stand up to the true reality.

          1. i never said that consumer mindset or their approach with regard premium product was different, my point is the value proposition that we associate to premium when it come to technology is evolving which each new technology breakthrough therefore what many of you consider to be a premium product today may not be the case in the next 5 years

            Just as it was the case with Sony new technology breakthrough can also disrupt Apple status as a premium brand when it come to new technology

          2. as i said already, after the touch screen revolution, everyone know by now that the next revolution will be Cloud Base service, and as of this day i am not confident that Apple will be able to maintain their premium technology statue in the Cloud as their do with Hardware and Software service today

          3. I would challenge the assumption that the cloud will be the only thing that matters in the future.

            I don’t think all the value will move to the cloud. Instead, I predict commoditization to come to the cloud pretty soon and hence the value will remain balanced between hardware, software and services, particularly in the premium segment.

            Of course, if all the value is sucked up into the cloud, Apple will have a huge problem as you say.

            On thing that I’m actually observing with acute interest is how and when the cloud will be commoditized. We are actually seeing signs of this with Google, Amazon, Microsoft, and even Apple racing to the bottom on storage pricing.

          4. what i mean by Cloud base service integrated with multi screens hardware is that as is the case with Google already, in the future there wont be no need to create a diferente entire new operating system with different APIs and different App for each product or screen

            All the intelligence the Data and APIs will be in the Cloud while the screen will simply be a dumb terminal with its own unique user interface.

            (ie) Android Wear is just Google Now with a unique user interface for a watch screen instead of a entire news OS therefore future integration with Hardware +Cloud service instead hardware + software as it is today

          5. I don’t think that the approach that you are describing is currently popular on smartphones. I’m not sure that it will ever be.

          6. Google has been going that route, and Microsoft is also doing it with Windows and Office. If that model becomes predominant, Microsoft has a distinct advantage, at least in markets where Windows is already ubiquitous.

            The problem is that security becomes a major concern, and I know a lot of people who are hesitant to jump into “the cloud” for that reason. Think of all of the celebrities who had their iCloud accounts hacked recently.

            I personally find it useful – for example being able to access all of my Office documents anywhere, on any device, and being able to automatically clone my desktop and settings on multiple Windows PCs without going through all of the setup again, or backup my iPhone in case something happens to it – but I also don’t fully trust it for my most important files and personal information. I still use physical backup for things I can’t afford to lose.

            If things continue to move in that direction, you’re right. Apple is at a huge disadvantage.

          7. it’s not a matter of If, that is already the case because the alternative is too complex too costly and a nightmare in term of security for everyone primarily developer that will have to create a different App for different interface when the value of software is disappearing

            Also what you stated above is a privacy concern, not a security one
            putting your Data in the Cloud is many time safer and less risky than in a local disk.

            the iCloud scandal had more to do with Apple’s bad reputation in security than the Cloud being less safer.

          8. the Android everywhere is exactly that

            the same Android operating system working on different screen with different interface such Tablet, TV, Watch, Auto etc.. and communicate with one another

            there is no need to create an entire different App for each platform, you just need to add a different Layer on your existing App for different interface.

            Now your android App work on Chromebook and it’s just the beginning

          9. I understand Google’s desire to have Android working on a wide variety of devices. I also understand the role of Material Design in unifying the user interface and in making it easier to develop cross-platform applications. I also understand the role of the cloud in connecting these devices.

            The initial discussion I was having with you was whether all the value will move into the cloud, with the hardware and software being commoditized. Therefore, I would like to give my thoughts onto whether cloud services that assist cross-platform interoperability are less susceptible to commoditization or not.

            Examples of such services are, at the filesystem-level, Dropbox, Google Drive, OneDrive, Amazon Cloud Drive and iCloud Drive. There is even an open source version that you can install on your own servers called ownCloud. OwnCloud is actually pretty good, and I put all my work stuff on it.

            As you can see, competition is plentiful and cheap. Price competition is already fierce. It looks like it will be a commoditized market soon.

            At the application-level, we have Google Docs, Zoho Office, Office 365, iWork in the Cloud and many other startups. Competition is not as fierce as filesystem-level cloud services but there doesn’t seem to be a formidable technical barrier to entry. Instead, the barrier seems to reside in marketing and business models. I see commoditization happening sooner rather than later. These services are web-based, and although they are not at the data and API level, they do treat the browser as a dumb-terminal.

            A newer application-level trend is to use native applications instead of the browser as the front-end technology, with the data residing in the cloud. Email is the classical example or this. Facebook and Twitter are also examples, as is Google Now. If I’m not mistaken, this is what you are talking about. Google’s Material Design might certainly play a role in this because it could potentially make cross platform development easier. Regarding the cloud-layer, it will be simpler than classical application-level cloud systems like Google Docs. Hence commoditization at the cloud-layer will happen in the same way or even faster. Indeed, services like Parse (acquired by Facebook) and Apple’s recent CloudKit announcement suggest that the cloud as a backend for native apps is going to be very easy and cheap to do in the future.

            In summary, I believe that the cloud services that assist cross-platform interoperability at the application-layer are a bit less susceptible to commoditization but not much.

            I think that the cloud will end up in the same way as hardware and software. I don’t think we will see a situation where all the value is sucked up in the cloud. Instead, value will be more balanced with the cloud being as commoditized as everything else. Value will be determined by how the product uniquely empowers the customer, regardless of whether it is a hardware, software or cloud product.

  6. Tech.pinions….. DON’T put a big blob of color on the left side of the page with Facebook, Twitter etc. in it. It partly hides text on the left side and it’s really annoying!

    1. Ah, sorry. I just noticed the admin made the change. I’m assuming it is blocking on mobile & tablet? Will resolve.

  7. What does it say when the creator of Disruption Theory repeatedly misapply it to Apple? Every time it happens, there is an excuse made either by Christensen or his disciples. This is unsettling.

    1. You have to consider that Steve Jobs himself was deeply influenced by “The Innovator’s Dilemma”. It would stand to reason that he applied his best thinking into how to escape it.

      Clayton Christensen is no doubt extremely smart. It might be the case though that Steve Jobs was even smarter.

      That’s why understanding Apple is difficult but remains essential to improving Disruption Theory. Which is probably why Horace Dediu was invited to the Clayton Christensen Institute.

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