The iPOD a Disruptive Innovation

The iPod changed the way we listen to music

At every evolutionary turning point be it appearance of life on Earth, the acquisition of speech by Homo sapiens or the invention of the printing press, the world’s complexity increased by a certain amount
Change is development, something is better now, than what existed beforehand it can be revolutionary examples the car is better than the horse and cart, the light bulb is better than the candle and the iPod is better than the Sony Discman etc.
Change is difficult to predict, who would ever thought that the majority of people in society would want a personal computer in the year 2009, certainly not Ken Olson who famously said “there is no reason anyone would want a personal computer in their home” he said this in 1977 at a time when he was the founder and CEO of Digital Equipment Corp (DEC) then the world’s leading minicomputer manufacturer.
Change is inevitable, but if can make the change or predict the change as was the case with Steve Jobs in the development of the iPod, you can reap the rewards and there is no better way of getting into an existing innovation like using the disruptive innovation approach.

“iPod is a disruptive innovation”
Disruptive innovation is a theory that can be describing the impact of new technologies on a firm’s existence (Christensen)
Disruptive innovations are generally innovations that are typically simpler cheaper to use versions of an existing product already in the market, they are more than often target low-end customers or entirely new customers. Established companies are not able to do much about these disruptive innovations that emerge at the bottom end of the market and work their way up into the mainstream. At the mainstream, this is the area were profit margins are the greatest and has the most customers etc, so good companies do what they should and focus most of their energy and resources in this area leaving them subject to disruptive innovations. The reason this happens is because established companies are focusing on their sustained innovation that is maximising profits and continue to make it more desirable and better hence “overshooting” because companies can innovate faster than people’s lives change so people don’t have the ability to absorb them making the product too good and too expensive. Also it is very difficult for an established company to focus on making a product not as good in order to achieve customers that you might get so a lot of the time they try harder to attract Undershot customers rather than Non consumers. However established companies can be the subject also of disruptions from top down as is the case with the iPod. Top down is easier to counter act against, as top down disruptive innovations target innovations which they can actually outperform that already exists which is usually at a higher price, first iPod cost $399 US dollars (the price of a Sony mid-range stereo system) and had the ability to store thousand of songs on a tiny hard drive allowing people to have thousand of songs with them all the time, but in the case of the iPod, Sony the largest distributors of digital music players at the time October 2001 did nothing. The iPod gave customers the option of picking their favourite songs on the internet in iTunes and putting it in there iPod with the click of a button. The reason I think they did nothing is because they knew that 95%of innovations launched by organisations fail and after all, Sony were the global leaders at the time, they also had a problem at the time because Sony owned major record labels such as RCA and Epic and they knew that there was a high possibility of illegal downloading of songs and didn’t want to be seen at the forefront of this potential corruption so they had a conflict of interests really, finally myopia was a problem as Sony was so focused on making their product better that they never looked outside the box and think of a drastically different approach to digital music players of the future.

Why is iPods disruptive innovation a success?
The iPod is a success in my opinion because they had a strategy which they stuck to, the design concept which they believed in, the spin wheel was revolutionary, the ease of access of songs and the ability to have so many in your pocket was the future and at the forefront of it all was the CEO Steve Jobs, he backed the iPod all the way and knew that the speed was essential to it’s success so applied the open innovation theory in acquiring the help of ARM and Pixo. This was an excellent approach as we can see the benefits other companies are having in this approach such as Procter & Gamble, sourcing their products outside the company with the success of the electric toothbrush being a good example. It came from the ideas of 4 entrepreneurs in Cleveland and now is the best selling toothbrush in the United States. This approach also saved money on research and development and give time to focus on other areas such as marketing. iPod was not initially a success, only attracting technology geeks, trend setters, least price sensitive buyers over shooters, with price being expensive at the time $399 dollars. This was ok for iPod at the start as the product was launched and was in the market. Gradually Apple introduced more attractive features such as bigger memory, longer lasting battery, videos, games which attracted more costumers bringing the price down getting a greater market share. Steve Jobs then went about applying disruptive innovation on his own product designing a product that was inferior to the main iPod that had less battery and memory with the introduction of the iPod shuffle and iPod mini. He targeted the low end of the market, that an inferior product was sufficient for undershot customers and maybe even non-consumers. I think he was applying the same approach as Johnson & Johnson’s did in the 80’s and Washington Post did in the 90’s in looking into disruptive innovations. Apple continues to apply the disruptive innovation method and have a team of people to target potential customers they are missing on, so much so that the iPod is a phenomenon. iPod is now a universal word, used for leisure, relaxation, education and exercise. The iPod is certainly making hay when the sun shines with the development of a bucket loads of accessories such as the speakers, holders, socks, wrist bands, earphones etc. iPod is so universal cars even come with iPod connections, and they went into calibration with U2 the band and Nike so that the iPod gives feedback when you run. iPod continues to listen to its costumers letting them know ways to make it better both practically and in technical ways. In the short term the iPod will stay on top in my opinion for a few reasons, iPods competition had to relate their products to them so why buy a copy when you can buy the real one, secondly the iPod ease of use gives it an emotional connection to people just like Nokia who design the main features on each phone the same for every phone, thirdly iPod continue to be innovate with new designs, styles and features and finally they have the best software hardware and services. iPod has sold over 163 million units and will continue to sell a lot more but the only problem I see is if another company follows there approach in disruptive innovation by coming from top down but I think Apple will have learned from Sony’s suicidal error and innovate with this potential competition.