Is The iPad A Disruptive Technology?

In January Apple announced the iPad.  Immediately the response was overwhelming and completely bi-modal.    One group of commentators believed the iPad was a revolutionary product which will usher in a new era of technology use.  The other group complained that the iPad was neither fish nor fowl, they already owned both a phone and notebook computer and no one wanted to carry yet another technology device.  As the debate grew more heated over the past month, it occurred to me that this debate could be viewed in terms of innovation.  Is the iPad a sustaining or disruptive innovation?

In The Innovator’s Dilemma, Clayton Christensen describes some of the characteristics of a disruptive innovation:

  1. It initially costs more than the item it is initially seen as replacing, for example, the initial 5 inch hard disk drives cost more on a per megabyte basis than the 8 inch drives they were seen as replacing.
  2. It doesn’t perform as well as similar previous devices; doing the same task, the new innovation is not quite as good as the existing innovation.
  3. Customers and market research did not show a great desire for the new innovation or device, e.g. 8 inch disk drive customers had little desire for a smaller form factor device with a higher price.
  4. There was confusion about exactly what one would do with it, or how it fits into the existing market.
  5. The initial market was small.

I believe the iPad meets each of these criteria.

  1. It costs more.  The iPad is compared with both the Amazon Kindle and netbook computers and is seen as too expensive in comparison.
  2. It does not perform as well.  The iPad is too heavy to carry around compared to a smartphone, and is missing important features when compared with a netbook, e.g. a keyboard, camera, SD slot etc.
  3. No one is asking for it.  There is limited market research to support the need for a tablet computer and previous tablet offerings have had limited success.
  4. Why does anyone need it? It is unclear what the “killer app” will be for the iPad which will drive wide adoption.
  5. Small initial market.  Estimates vary, but even the most optimistic predict the iPad will initially be far smaller than either smartphones or netbooks.

However, Christensen also mentions that each disruptive technology also provides new capabilities or features which are attractive to a part of the market not well served by existing solutions.  I think that the iPad will enable entirely new types of applications which will drive broad adoption of this device.  Thinking about the iPad within the context of smartphones and laptops misses the essential point, and these new applications will define new usage modes for tablets, entirely different from what is possible on previous devices.  Let me describe two examples of these new applications.

The Daily Prophet.  Anyone who has read a Harry Potter book is familiar with the animated daily newspaper of the wizarding world.  The iPad provides a platform for more involving newspapers, magazines, and books.  Imagine science textbooks where you can actually watch or participate in a simulation of an experiment, or an anatomy text where instead of just looking at static pictures of organs, you can rotate them in 3D.  Magazines and newspapers are more compelling with new media content, or even the ability to interact with other readers in real time with social media extensions.  Reading is something most people do sitting in chairs, on couches or in bed.  A smartphone’s screen is too small, and trying to read from a notebook in bed is difficult at best.  The iPad has a natural form factor for reading, and its touch screen provides a natural way of interacting with these new types of media.

The TV Companion. How many times during the recent winter Olympics were you watching an event and wanted to know more about the competitors, or the event itself.  What are the rules of curling?  What’s the difference between a triple axel and a triple flip?  The TV companion application synchronizes information on your iPad with the TV program you are watching.  Watch a football game and get detailed statistics on each player and the ability to instantly replay any play at any time.  During a movie, you suddenly want to know what other movies a movie star appeared in it just a touch away with the TV companion.

I think the important lesson from all of the hype surrounding the iPad is not to look at how poorly a new innovation performs the tasks of existing products, but what new types of tasks it enables.  I know that I for one can’t wait to get my new iPad.

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11 Responses to Is The iPad A Disruptive Technology?

  1. Agree with the point you make about the iPad not being a substitute for a netbook or smartphone. Though most in the press haven’t seemed to make this observation yet, the iPhone platform interface is suitable for seniors who aren’t computer literate. It also connects them with the power of the usability of iPhone apps. The expanded display size of the iPad will be essential for them.

    I’d like one for our coffee table or kitchen counter. You could imagine one that helps you keep track of what you need to buy at the store–just scan the bar code for things you run out of. If the thing is sitting on the counter anyway, doing that or looking up a recipe would be simple. It’s tempting to think about an iPad, Logitech Harmony-style universal remote for your home, a place to look up things without having to haul out the laptop or the keyboard and mouse.

  2. Dave Drager says:

    Nice analysis of the iPad as well as any disruptive technology. Generally speaking, every disruptive technology has many naysayers who are currently invested in existing technologies and are unable to conceive of a world where those technologies aren’t king.

    The iPad will speak to a whole new breed of consumers. Those who do not need a full PC or laptop, but want to check email occasionally or view the score of their favorite teams. While being cheaper than a PC, it also creates an ongoing revenue stream to AT&T (and Apple) which is fairly rare in the PC world.

    While not limited to the iPad, the tablet PC has been a long time coming. Apple, as it has done with the mp3 player and cell phone, is able to place an exquisite UI on top of evolutionary hardware to produce a winning combination. If I were a betting man, I would be putting my money on the iPad.

  3. While the iPad might seem to meet the definitions of a disruptive technology, its certainly not the first in the line of tablets or portable media devices. I can certainly think of scenarios under which an iPad-like might be useful, but as it stands, the 1st generation iPad is not something I would hold my breath for.

    What I do hope is that this will be the beginning of several similar devices that will make its way into the market. Like the improvements made with each generation of the iPod, hopefully we will see significant updates in the future versions of the the iPad as well.

  4. Alexander Zuver says:

    Even if you don’t like Steve Jobs and the iPad hype, this will drive how we will be interacting with our content… “multi touch gestures.”

    I don’t want to be stuck to using one device however. An interesting projects in this space is the “Open Screen Project” which is an industry-wide initiative, led by Adobe and backed by other industry leaders who all share one clear vision: Enable consumers to engage with rich Internet experiences seamlessly across any device, anywhere.http://www.openscreenproject.org/

  5. Alexander Zuver says:

    And yes it seems we will have the capability to develop these using Flash to be published to the iPad. http://tinyurl.com/y8fyxk3

  6. Hedi Regaya says:

    Hi,

    On my opinion, the iPad is a logical consequence of the Research and Development (R&D) expenses of Apple.
    To be innovative you have to create, you have to spend money.

    For instance the multitouch technology (2, 3 and 4 finders motions), if Apple only uses it on the iPhone: what a waste, but if it also integrates it onto its laptops tracks pads, into its new mouse, into the iPod and into the iPad: what a great way to dilute the expenses and make profit!

    The iPad is the fruit of the R&D of Apple since the year 2K: look at it you’ll find everything in that device: the Mac OS X, light sensors, motion sensors, multi touch screen, iPod feature, iPhoto innovations, ITMS and App Store integration, etc…

    They had to make it! Good move!

    Now the consumer’s side: all of these great innovations for $599? YES.

  7. Tom Foale says:

    Technologies aren’t disruptive – business models are. To be disruptive the iPad has to be something that the incumbents cannot adopt because it conflicts with their resources, processes and values – it doesn’t create a big enough opportunity, it doesn’t make a high enough margin or it requires completely different processes and skills.

    However, Apple’s resources and processes are similar to other equipment manufacturers – it cannot launch a disruption that its rivals can’t copy, as we have seen with the iPhone. It’s values are slightly different as it is a vertically integrated manufacturer rather than modularised, but that’s a step backward in the development cycle and easy to emulate if needed.

    HP launched a separate division to its dominant laser printer division to develop the inkjet printer – laser printers are now departmental devices and inkjets have taken over the bottom end of the consumer and business markets. Each business has different ways of making money and completely different resources, processes and values. The typical disruptor needs space to develop, grows slowly at first and it will be some time before it contributes significantly to group growth targets and profits. This is exactly why Apple killed the Newton – it was groundbreaking but it was costing more to develop than the early market suggested it was worth.

    Is it possible to develop a disruptive play in this space? Certainly, but the iPad isn’t it – unless Apple gives it its own business with limited resources, insists on early profits but doesn’t care how many it sells in the first ten years. Then it may be able to find its own early markets and future success.

  8. Hi !, you have a great blog here! I’m definitely going to bookmark you! Thank you for your info.And this is Tablets Computers site/blog. It pretty much covers Tablets Computers related stuff.

  9. Well, from where I sit it looks as if the iPad has been very disruptive. All the pundits seem to have got it just as wrong as they did before with iPhone. It has been the most successful launch of any consumer device I can recall (including the previous holder the iPhone). More detailed comment in context below:

    “I believe the iPad meets each of these criteria.”

    “1. It costs more. The iPad is compared with both the Amazon Kindle and netbook computers and is seen as too expensive in comparison.” The Kindle is not accessible by most disabled users. It was therefore toast with the huge education market even before it launched. You may have noticed that netbook sales began to fall just as iPad launched. The price argument does not tally with the record sales.

    “2. It does not perform as well. The iPad is too heavy to carry around compared to a smartphone, and is missing important features when compared with a netbook, e.g. a keyboard, camera, SD slot etc.” It performs very well indeed, which is why it is so successful.
    3. No one is asking for it. There is limited market research to support the need for a tablet computer and previous tablet offerings have had limited success.
    4. Why does anyone need it? It is unclear what the “killer app” will be for the iPad which will drive wide adoption.
    5. Small initial market. Estimates vary, but even the most optimistic predict the iPad will initially be far smaller than either smartphones or netbooks.

    “2. It does not perform as well. The iPad is too heavy to carry around compared to a smartphone, and is missing important features when compared with a netbook, e.g. a keyboard, camera, SD slot etc.” It performs very well indeed for its customers (if not analysts), which is why it is so successful. The ‘omissions’ you mention have not prevented the success. Comparing it with a smartphone is ridiculous. The obsession with ‘features’ is for nerds. They said Apple would be dead within two years back when they dropped the floppy disk five years before anyone else. That was the beginning of a huge growth phase for Apple.

    “3. No one is asking for it. There is limited market research to support the need for a tablet computer and previous tablet offerings have had limited success.” I believe that when Henry Ford asked what uses would like to see in improved transport the answer was ‘faster horses’. Other tablets failed because they were c***. Simple as that.

    “4. Why does anyone need it? It is unclear what the “killer app” will be for the iPad which will drive wide adoption.” People ‘want’ it, they only need it once they have it (and are asked to do without it). The iPad is its own killer App.

    “5. Small initial market. Estimates vary, but even the most optimistic predict the iPad will initially be far smaller than either smartphones or netbooks.” Yes, and they are now all scrambling to rewrite history. See for example: http://tech.fortune.cnn.com/2010/06/18/forrester-ipad-sales-will-plummet/

    It never fails to amaze me how almost all analysts seem to lack any understanding of Apple, its products and their relationship with customers. Which suits me down to the ground. I sold my house and bought Apple shares some years ago. They are currently around their all-time high, and that in the worst recession in living memory! How do they do that?

  10. Excellent post, but Tom has it right.

    The business model – selling in Apple Stores fitting nicely alongside iPhones (and iBooks) with a cell phone plan – hasn’t changed.

    Disruptive technologies compete from the bottom. Perhaps 5 inch drives were more expensive than 8″ on a cost per megabyte basis, but they were cheaper per unit. They sacrificed the critical competitive paradigms of cost per megabyte, access speed and capacity.

    As cell network enabled device, the iPad is a more expensive iPhone. In fact, Apple has long been classified as a consumer goods company and the iPad is a model squeezed above the iPod and iPhone and below an iMac to fill a product line hole. The strategy, premium pricing against competitive entrees – such as the Kindle in its case – is identical to the other products in the portfolio. Hardely a compete from the bottom paradigm.

    Selling iBooks is ‘Sustaining’ for iPod’s iTunes and the iPhone’s App Store, not disruptive, and effectively copies standard Apple brand management approach. The notion of disruptive is simply hype to pump up the volume.

    Finally, it is sustaining digital print media and increasing the number of library users. Digital print media is already a large market, not a niche.

    With 3 million copies sold in 80 days, the iPad does satisfy the growth needs of a large company. That is the biggest disqualifier of all.

    For more thoughts on Disruptive Innovation versus Klingon energy weapons please refer to http://d-bits.com/disruptive-is-inferior/

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