Disruptive Innovations & LCD Projectors

Do “disruptive technologies” have to be cheaper than the thing they are disrupting? It’s may seem a silly question, but it cuts to the heart of an anomaly in Clay Christensen’s widely-loved theory. After all, Clay argues compellingly that many businesses are caught napping by cheaper, toy-like technologies that rapidly mature and eventually unseat market incumbents.

So, can more expensive technologies be disruptive too? Under the orthodox version of Christensen’s model the answer is seemingly “No”. All of his favored examples, from hard-drives to milkshakes, are of cheaper technologies that increased rapidly in price-performance and quality and eventually won the day.


Consider, by way of counterpoint, the case of overhead projectors. The old-style overhead projector, the sort of thing you used to see in almost any classroom, is $700 or so — and it is rapidly disappearing. It is being replaced, however, by the LCD beam projector, whether portable or ceiling mounted.

But here is the issue. The LCD projector is much more expensive than the 3M-style thing it is replacing. A good LCD projector can easily cost $10,000. It is, nevertheless, rapidly replacing acetate-requiring overheads in many classrooms, and in almost all boardrooms.

So what does it mean? Is the LCD beam projector not disruptive? Would Clay call it instead a sustaining innovation? It would be hard to argue the latter point, given how different such machines are from the old units they are replacing. It seems intead that there is an anomaly at the core of disruptive innovation, one that threatens to disrupt disruption by turning its basic price principle upside-down.

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Comments

  1. Chari says:

    I believe Christensen’s fixed this loophole in his latest book (Innovator’s Solution). He now distinguishes two kinds of disruptive innovations: low-end disruptions and new-market disruptions. In this taxonomy, the LCD beam projector would be a new-market disruption.
    -Chari.

  2. Paul K says:

    Yes, I had seen his “new-market disruption” clarification, but I’m not convinced it covers him off entirely. After all, he uses coronary balloon angioplasty as an example of NMD, and as a colleague and I were saying here this morning, it’s far from clear that CBA is really disruptive at all. It’s more that there is a continuum of solutions, from open-heart to balloon angioplasty, and it is classic techno-utopic logic to presume that the one replaces (rather than augments) the other.
    Anyway, I don’t mean trying to pick nits here, as there is enough of an anti-Christensen academic grousing industry already. But this price anomaly is interesting enough that I think it’s worth noting — after all, there is nothing worse than looking behind you for an approaching train, only to get run over by one coming straight at you.

  3. Chris says:

    $10,000 LCD projectors??? That would be very high end projector.
    SVGA (800×600) LCD projectors are in the $800-$1000 range right now, and the XGA (1024×768) are in the $1600-$2000 range and the DLP prjectors are slightly cheaper.
    http://www.tigerdirect.com/applications/Category/category_tlc.asp?CatId=23
    Also, if the reason they would buy an overhead projector in the first place, was the ability to display presentations they have already made on their computer (powerpoint, whatever), then you should also factor in the cost of the LCD panel that would sit on the bed of an overhead projector. Have not seen one of these LCD panels lately, so not sure of the current pricing, but would guesstimate $300.

  4. Paul K says:

    Oh, no question. $10,000 is for a high-end ceiling-mounted projector, but that’s my point: in many classrooms here we are replacing $700 overhead projectors with $5-$10k LCD projectors. Nothing wrong with it, and I think it’s great, but it flies in the face of the idea that you are disrupted by toy-like cheaper technologies, not expensive high-end products.
    And for what it’s worth, even at price-parity it’s still disruptive, but it violates the toy-like criteria of Christensen’s.