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Why Apple May Die

Hugh Pickens writes (1984118) writes | about a year ago

Businesses 0

Hugh Pickens writes writes "Cromwell Schubarth writes that Harvard business professor Clayton Christensen, author of The Innovator’s Dilemma, thinks Apple, Tesla Motors, venture capitalists and most of the nation’s colleges and universities could be killed by less advanced competitors in the same way that many once dominant technology companies have been in the past. Christensen's theory of disruption centers around how dominant industry leaders will react to a newcomer: “It allows you to predict whether you will kill the incumbents or whether the incumbents will kill you.” If a newcomer thinks it can win by competing at the high end, “the incumbents will always kill you.” If they come in at the bottom of the market and offer something that at first is not as good, the legacy companies won’t feel threatened until too late, after the newcomers have gained a foothold in the market. According to Christensen Apple could be on path for a classic disruption because successful innovative products like the iPhone are usually based on proprietary technology because that is how the dominant business carves out, protects and builds its top market position. But at some point as they get better and better, they start to exceed what people actually need or are willing to pay extra for. “When that happens the people who have the proprietary architecture are pushed to the ceiling and the volume goes to the open players. So in smartphones the Android operating system has consummate modularity that now allows hundreds of people in Vietnam and China to assemble these things." As the dominant architecture becomes open and modular, the value of their proprietary design becomes commoditized itself. "It may not be as good, but almost good enough is often good enough.”"

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