Lcd Tv as Disruptive Innovstion

LCD TV is a disruptive technology.

Christensen (founder of disruptive technology) defines a disruptive innovation as a product or service designed for a new a set of customers.

Disruptive innovations consist of off-the-shelf components put together in a product architecture that is generally simpler than previous approaches. They offer a different package of attributes valued only in emerging markets remote from, and unimportant.

Beginning:

Discoveries like opto-electronic properties of LCD were made by George H. Heilmeier at RCA in 1962-64. Thus, RCA had developed an extensive knowledge about this new technology in those early days. Though RCA pioneered LCD, it was one of the dominant players in the dominant CRT technology. At RCA, more research was done in the LCD area, up until 1971.

In the late 60s and early 70’s, RCA was frequently visited by Japanese companies who showed great interest in the new technology. Once RCA had decided not to commercialize LCD, they were very generous and shared much of the knowledge with the Japanese delegations.

Evolution:

In 1988, Sharp presented the first 14 inch colour LCD-TV for the world. The screen was 1/13 as thick as a CRT and weighed 75% less! This was the point when LCD became a serious threat to the old technology, and now it was just a matter of more time.

2005 was the first year when more LCD TVs were sold than CRT TV. The following year, only 25 percent of the market was CRT. And once the disruption happened, it was Sharp, LG, Sony, Hitachi and Samsung who rapidly gained markets shares with the new technology. Most firms were thus either Japanese or Korean.

Conclusions:

RCA more or less invented LCD, but never patented the technology and gave it away to the Japanese companies, leading to following conclusions:

* Small markets do not serve the growth needs of big firms. // Christensen (1997)

* There is no financial logic in developing a technology that a firm’s mainstream customers do not...