Defining (and spotting) ‘disruptive’ innovation

In recognition of the fifth anniversary of the Apple iPhone, John Gruber of Daring Fireball wrote an insightful post about the iPhone being a disruptor, and how Clayton Christensen (who wrote the groundbreaking classic The Innovator’s Dilemma) did not recognize it as such when it first came out.

I encourage you to read Gruber’s full post, but here’s the punch line:

“The iPhone is not and never was a phone.  It is a pocket-sized computer that obviates the phone. The iPhone is to cell phones what the Mac was to typewriters.”

Gruber’s point is that the iPhone wasn’t a disruptor of mobile phones; Christensen correctly saw it as a sustaining innovation in that industry. Instead, the iPhone was a disruptor of portable computers, and that’s how we should have viewed it all along… and foreseen its evolution into the iPad and its resulting impact on the computing industry.


First: a quick clarification. I don’t just mean “disruptive” in the generic sense, but in the specific sense coined by Christensen. A disruptive technology typically starts at the low- (or under-served) end of the market – not perceived as a threat to incumbents – and eventually displaces the existing market. As Michael Raynor (who co-authored with Christensen The Innovator’s Solution) clarifies, disruption is characterized by:

  • targeting customers not currently served by incumbents; and then
  • marching upmarket, enabled by key technologies.

Within this frame, we can now see that the iPhone had all the marks of a disruptive technology in the portable computer market: it was slow, it had a small screen, and it did not support standard computing apps.

But it did have the first true mobile web browser and always-on connectivity, and with the characteristic upmarket move of a disruptive technology, the hardware and software sides of the iPhone platform progressed to intersect the needs of most portable computer users today. I say platform because by spawning the app ecosystem, the iPhone redefined the value proposition of a mobile phone. And because of this, Apple is destroying players in the mobile phone market, and now exerting tremendous pressure on PC companies.

How did this happen?


Didn’t the incumbent companies see what was happening? Sure they did. But it’s hard to see competition from disruptive “substitutes” outside one’s industry, and even harder to figure out what to do about it.

However, those of us who work in innovation need to recognize such blind spots and exploit the opportunities presented by them as often as we can.

To do that, you need to have perspective. Many disruptors come from outside an industry, but Apple was already in the computer industry… and in fact exploited its computing and user interface expertise to create the iPhone. What gave Apple more perspective? A more focused understanding of what people wanted to do with their mobile devices. When coupled with their legacy expertise, this perspective guided Apple to act on how they could connect the mobile phone and computer industries differently than anyone had done before.

The brilliance, of course, was in disrupting one market (portable computers) with a low-end offering while making a ton of profit with a premium offering in a different market (mobile phones) – and all by using the same product.  That’s really hard to do, requiring a deep understanding of the interconnectedness between two large industries, and may never be replicated at the same scale again.

So even if all companies can’t create iPhones, what lessons can they take from this?

First, it’s important to broaden perspective and look beyond the normal boundaries of one’s industry. Interacting with people in other industries to learn how technology is changing their industries can offer lessons to apply in one’s own industry.

Second, it’s critical to gain deeper understanding of customers through techniques such as ethnography and other social science methods to uncover what people actually want – not just what they say they need.

Third, companies must act on the insights gained from these new perspectives – not necessarily by investing great sums of their R&D budgets, but in a staged, real options approach that tests concepts quickly and invests more as they get more information.

And if it turns out that companies don’t have all the necessary expertise in-house to exploit all of the above opportunities, well, that’s where partnering with other companies using frameworks like open innovation comes in. Then you’re not just spotting the opportunities, but really working towards addressing them.


3 thoughts on “Defining (and spotting) ‘disruptive’ innovation

  1. Doug Williams

    Great post, Lawrence. It helps put Apple’s accomplishments in perspective. And this doesn’t even touch upon the other adjacent market — tablets — that the disruptive iPhone ultimately created. That one is less of a blindspot, since the tablet concept had been tried numerous times in the past. But it took all of the success of iTunes and iPhone to create the opportunity for iPad to succeed.

  2. Lawrence Lee

    Thanks Doug – yes, you raise a good point about the tablet market, and I think it was smart for Apple to develop the iPhone first when they actually had the concept and core technology of the iPad first. Not only was the smartphone market larger, but I think the iPhone platform was a better one to start training users on the multi-touch UI and apps ecosystem.

    Regarding disruption theory, I also think that PC manufacturers would have seen the iPad more as a direct threat and developed their competitive tablets sooner. By focusing on the iPhone first, Apple was able to perfect many of the technologies that went into the iPad, while the PC manufacturers were busy trying to copy the MacBook Air.

  3. Chetan

    Very insightful post Lawrence. Brings to mind Steve Jobs Stanford commencement talk, especially his emphasis about “connecting the dots”. Unfortunately too many people don’t have the breadth of life experience required to do this properly, you can’t connect dots you don’t have. Focus for many decades (both within academia & industry) has been on selecting & rewarding for depth.

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