walkitout (walkitout) wrote,

the Christensen Effect and the iPhone

For what it is worth, I agree with the headline on this piece:


Christensen is old, he's male, he's Mormon and he's used to people bowing down to him. Obvs, when Jill Lepore put this out, spittle was gonna happen:


However, because I'm autistic, I'm going to completely miss everyone's point here and focus on that iPhone prediction mentioned by Lepore:

"In 2007, Christensen told Business Week that “the prediction of the theory would be that Apple won’t succeed with the iPhone,” adding, “History speaks pretty loudly on that.” In its first five years, the iPhone generated a hundred and fifty billion dollars of revenue."

Here is the Businessweek article:


It's a 10-years-after-your-book-came-out piece that mentions, among other things, that he was working with Rita Gunter McGrath, whose _The End of Competitive Advantage_ I enjoyed, but have noted limitations of. It also includes this paragraph about the iPhone. Note the date on the article: this is _before_ anyone had laid hands on an iPhone.

Long quote begins:

"But just watch the [competitors'] advertisements that you hear for the ability to download music onto your mobile phone. Music on the mobile phone has to be downloaded in an open architecture way from Yahoo! Music or someplace else [other than iTunes]. Which means it's clunkier, not as good. Mobile phones don't have as much storage capacity, nor are their interfaces as intuitive [as iPods]. But for some folks, they're good enough, and the trajectories [of people using their phone as a medium for listening to music] just keep getting better and better.

So music on the mobile phone is going to disrupt the iPod? But Apple's just about to launch the iPhone.

The iPhone is a sustaining technology relative to Nokia. In other words, Apple is leaping ahead on the sustaining curve [by building a better phone]. But the prediction of the theory would be that Apple won't succeed with the iPhone. They've launched an innovation that the existing players in the industry are heavily motivated to beat: It's not [truly] disruptive. History speaks pretty loudly on that, that the probability of success is going to be limited."

End of Long Quote.

The argument here has several components. The iPhone has not yet come out; Christensen has no idea how disruptive it really is (the Android platform is also in the future at this point, and is radically redesigned and delayed in response to what Apple shipped, because Google realized what they had been working on was hopelessly behind what Apple had produced). Instead, he is focused on existing mobile phones disrupting Apples existing iPod business. AND HE WAS RIGHT. The iPod is gone. It was disrupted in part by other phones, but it was comprehensively replaced, over time, by the iPhone.

Second, he argues that you cannot download music from iTunes -- then a PC thing only -- to a mobile phone. You have to get music from somewhere else. He does not envision Apple changing that, and it took them a while. They lost a lot of customers to Android and other platforms BECAUSE iTunes was very difficult to transition, and using it in the meantime was so infuriating that people gave up on the entire platform. So he was right there, too.

Let's keep things clear here: I still fucking loathe Christensen. But credit where credit is due. Music _was_ a viable point to attack the Apple universe. In order to deal with that attack, Apple had to transition iTunes to the mobile device (which they did). And along the way, they lost customers, because it was so awkward dealing with the legacy that they were incrementaling along. If they hadn't done a lot of hard things very, very well, in the face of relentless criticism and punishment of AAPL, they would not have succeeded. History did indeed predict the iPhone's failure. But Apple management turned out to be absolutely stellar.

Christensen's message has always been that good managers can be blindsided by technological developments that are cheaper and attractive to a new audience, but do not meet the current market's need at the time they first appear. Worse Is Better. The new audience luuuurrrvvves the new product and it gets incrementaled to a point where the old market decides it is good enough and if the existing industry isn't paying attention, they go under (c.f. Kodak). You can often purchase your way out of this problem (acquire the successful startup/disruptor) or roll-your-own-copy. You don't have to just roll over and die, and Christensen never suggested you should roll over and die. While Lepore is correct to argue that Christensen's history is weak, from a business perspective, his advice -- hey, pay attention to that crap that is selling like mad, it'll take your core business away if you aren't really careful -- has always been sound. The fact that he's sort of terrible at picking stocks speaks more to his inability to recognize the difference between ploddingly competent management and unbelievably excellent management than any failure of his thesis.

I feel mildly bad about picking on Christensen, because his current terrible behavior is probably in part driven by some health issues (diabetes, heart attack, stroke AND cancer!!!) that had an impact on his brain.


"The stroke killed as much as a quarter of his brain and robbed him of nearly all of his verbal ability."

OTOH, you go saying crap in public, you get what you get. I know I do.
Tags: economics, our future economy today

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