(2006-01-10) Christensen Ipod Disruption Proprietary

Clayton Christensen believes Apple Computer's IPod needs to break out of the proprietary stage to avoid being wiped out down the road. Look at any industry -- not just computers and MP3 players. You also see it in aircrafts and software, and medical devices, and over and over. During the early stages of an industry, when the functionality and reliability of a product isn't yet adequate to meet customer's needs, a proprietary solution is almost always the right solution -- because it allows you to knit all the pieces together in an optimized way. But once the technology matures and becomes good enough, industry standards emerge. That leads to the standardization of interfaces, which lets companies specialize on pieces of the overall system, and the product becomes modular (InterOp). At that point, the Competitive Advantage of the early leader dissipates, and the ability to make money migrates to whoever controls the performance-defining subsystem.

Interesting discussion about Harvard Business School case study on Apple Computer history (John Sculley, etc.) (maybe that proves that MBA-s are wrong).

May'2012: He makes similar arguments about the IPhone. I worry that Apple is in the same situation, in that the sequence of extraordinary products has been disruptive relative to the traditional competitors in the marketplace, but relative to Apple’s business model, they have not been disruptive to Apple. So they haven’t seen this problem before.