Clayton Christensen, father of innovation theory, has described disruption as the result of an innovative product or service that is just good enough for an underserved or unserved market. The incumbents, with a business model and profit margins that prefer to pull out of that dragging end of the market anyways, pull back, focusing on ever higher end customers and margins. Over time, the “just good enough” product gets better and better, pushing the incumbents into higher margins in smaller markets, until there is nothing left and they keel over.
Digital cameras functioned this way in 2 markets: attacking film cameras and simultaneously undermining film manufacturers. Initial digital cameras – remember 1.2MP? – were grainy and slow, and didn’t store a lot of pictures. Those embedded in phones were even worse. But they were good enough for those who could not afford the ongoing expense of film, the time to develop, the wasted film and development of unknown poorly developed pictures… and for cameraphones, those who simply did not have a camera with them at the important time.
Personally, I lost 2 crucial days of pictures on one of my most beautiful vacations – Far North Queensland, Australia – when I wasn’t aware that my expensive SLR camera had no film in it.
Over time, digital cameras got better and better. I can now buy a 20MP compact camera for $100 or a digital SLR for $500 on Amazon. Film is, indeed, dead. Similarly, phone cameras got better, with the latest iPhone 5S sporting an 8MP camera with plenty of advanced features.
Many high-end camera makers, however, could take comfort in the really important, high-end market still needing their cameras. After all, would you shoot a movie, a TV show, or even an all-important, very expensive commercial on an iPhone??
As a matter of fact, yes. Bentley, the ultra-high-end of car manufacturers, whose cars start at $200,000 USD, released a 5-minute online and on-TV (slimmed down version) commercial, filmed entirely using an iPhone 5S. Yes, they bought some relatively expensive add-on lenses and stabilizers, but if you watch the video, you will also see that they use some basic home gear. To complete the picture, all of the editing was done on an iPad with a $50 keyboard and the $5 (!) iMovie app.
A high-end commercial for a the highest-end product shot using an $850 phone already sitting in everyone’s pocket, and edited on an $850 tablet that they probably already had? People at Sony, Canon and Alexa should be very nervous.