Weightless and the Innovator’s Dilemma
January 13, 2012Clayton Christensen’s book on the Innovator’s Dilemma has become a classic. It discusses how difficult it is for an established company to react to the rise of a technology that is apparently worse than the one they are currently profiting from. Christensen gives the example of a hard disk manufacturer that is working on ever bigger and faster disks and fails to spot that there is a growing market for smaller and slower, but much cheaper, disk drives.
The wireless machine-to-machine (M2M) market exhibits just these attributes. The cellular industry is obsessed with ever faster data rates, ever greater capacity (and ever more complex and expensive devices). The 4G standard is the epitomy of this. For everyone in the industry this has been a successful and profitable obsession and with smart phone use growing it looks like it may continue in this manner for a while yet.
So a new technology that has a lower data rate and less functionality does not really compute for the cellular industry. They tell those in the M2M world that their technology can be adapted to meet requirements, that cellular is well established and that perhaps a variant of 4G can be produced that is cheaper but slower. None of this is actually wrong, but if you wanted to design a Toyota you probably wouldn’t start with a Ferrari and cost-reduce it.
Weightless is a technology designed specifically for M2M. Compared to cellular technologies it is slower and lower capacity, but crucially it is an order of magnitude cheaper and meets requirements such as 10-year battery life. Just like the smaller disk drive in Christensen’s example, it does not follow the previous trends – it truly is disruptive. And it does lead to a dilemma for the mobile operators: should they try to support this requirement with their cellular technology or is it time to embrace an additional “product line”?
The Innovator’s Dilemma shows us how difficult it can be for industry leaders to respond to disruptive technologies. It also shows what happens when they fail to do so.
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