Summary of Wikipedia’s entry on Disruptive Technology:
- Disruptive technology/innovation is a technological innovation/product/service that uses a “disruptive” strategy, rather than a “sustaining” strategy (incremental improvement)
- Can be classified into low-end and new-market
- New-market disruption aims at non-consumption/untapped market; targets customers who have needs that were previously unserved by existing incumbents.
- Low-end disruption aims at mainstream customers with needs not met/underserved/overserved by existing solutions. Low-end disruption targets customers who do not need the full performance valued by customers at the high-end of the market
- Disruptive technology can dominate market by filling a role that older technology cannot fill or by displacing incumbents by means of successively moving up-market through performance improvements (e.g. digital photography)
- Low-end disruption occurs when the rate at which products improve exceeds the rate at which customers can adopt the new performance. Therefore, at some point the performance of the product overshoots the needs of certain customer segments. At this point, a disruptive technology may enter the market and provide a product which has lower performance than the incumbent but which exceeds the requirements of certain segments, thereby gaining a foothold in the market.