Technology is a dynamic phenomenon. Competition fuels scientific progress for improving technologies. With the growth of technology performances in key areas like complexity, efficiency, capacity, size, accuracy, usability, and compactness, Innovation opportunity, as well as a threat, keeps unfolding. The progression of the underlying technology keeps making the quality better and the cost lower of innovations. In the competition space, technology progression is the key. In supporting innovation decisions, on the one hand, the progress of the existing technology core should be predicted. On the other hand, the growth of the new technologies having substitution as well as complementary effects should also be tracked and forecasted. Hence, due to technology forecasting failures, giants disappear by giving birth to giants.
The prediction of related technologies is vital for a firm to assess substitution possibility & speed, paradigm shift or trajectory evolution, penetration share, diffusion rate, and Breakthrough possibility along with timing among others. Along with the progression of technology, the adoption pattern of innovations in different market segments also keeps changing. The response of the competition in the form of replication, imitation, innovation, and also substitution also depends on the state and progress of technology, and market response. To remain in sync, technology forecasting should also be linked with the prediction of market and customer trends and the change of the trend, and most importantly, with the likely unfolding competition responses.
Due to technology forecasting failures, often industry giants mistakenly give up the big untapped opportunities, giving birth to new giants. Due to such prediction failures, they also suffer from major disruptive forces. Here are a few examples:
RCA’s Technology forecasting failure about Transistor made Sony a giant:
In the 1950s, among consumer electronics companies RCA was the market leader. The RCA Corporation was a major American electronics company, which was founded as the Radio Corporation of America in 1919. In the 1920s, RCA was the lead manufacturer of radio receivers. It also created the first national radio network, the National Broadcasting Company (NBC). RCA was also at the forefront in the introduction and development of television, both black-and-white and color. In those days, RCA’s core technology in making radio receivers and TV sets was vacuum tubes. By the 1950s, vacuum tube technology matured. In 1947, Bell laboratory invented a solid-state technology with the potential to be a substitute to the vacuum tube. Like many other technologies, transistors had many limitations, including high noise and low power, at the beginning.
Due to those limitations, transistors were not suitable to replace vacuum tubes of RCA’s high quality, big radio receivers, and TV sets. As a result, RCA did not pay serious attention to the transistor. But a newborn Japanese Sony spotted the potential of the transistor. Instead of competing with the RCA’s product, Sony innovated small radio receivers and TV sets using transistors as a substitute to vacuum tubes. In comparison to RCA’s ones, Sony’s radio receivers and TV sets were far smaller and less expensive; they were also producing poorer quality sound and pictures. But the Transistor technology was highly amenable to improvement. Sony, other interested firms, research laboratories, and universities gave a serious push in science, and technology improving both the transistor and the process in making it.
Due to RCA’s technology forecasting failures: Sony grew into a giant company
As a result, rapidly the quality of the signal (producing sound or pictures) processed by the transistor kept improving. Moreover, the size, as well as the failure rate of the transistor, rapidly kept falling, making it a strong substitute to the high-end vacuum tube, even for the purpose of making RCA’s products. But before RCA’s response, Sony created a new market, consequentially took over the market of RCA. Due to the failure of the growth of the transistor technology, and its likely implications on customers’ and competitors’ responses, Sony grew up as a giant, along with the gradual departure of RCA.
Kodak’s failure in predicting digital imaging made Sony succeed:
American icon Kodak created the industry of photography. And the film was the technology core. In the late 1960s, a new technology core, charge-coupled device (CCD), for capturing light. Despite the potential, the initial emergence was very primitive. In 1970, 8×8 sensor was not at all suitable for making camera. But Sony spotted the potential and started nurturing the underlying technology. In 1975, Steven Sasson invented the first self-contained digital camera at Eastman Kodak. This black and white camera weighed 8 pounds (3.6 kg) and had only 100 × 100 resolution (0.01 megapixels).
The image was recorded onto a cassette tape and this process took 23 seconds. In comparison to the film-based cameras, Steven’s this digital box was a primitive alternative. As a result, Kodak decided not to pursue that electronic invention. On the other hand, Sony’s steady progression in the underlying science and technology kept improving both the resolution and also the noise level of the electronic image sensor. By 1985, CCD technology reached the maturity to support the innovation of portable video cameras—making Sony’s Handycam must-have items in American households by the 1990s. The subsequent development of compact as well as DSLR cameras out of electronic sensors cause disruption to film-based products as well as businesses. Due to the technology forecasting failures about the growth of electronic imaging technology and its consequences, giant Kodak became bankrupt, and Sony built a mega new imaging business out of nothing.
IBM failed to predict the future of PC, making Microsoft and Intel Giants:
In the computer industry, the decade of 1970s was a fermentation period, shaping the journey of personal computers. In the late 1970s, the personal computer industry reaching $150 million market size attracted IBM. But on the contrary to a single IBM computer in the early 1960s costing as much as $9 million, successful microcomputer company Vector Graphic’s fiscal 1980 revenue of $12 million was insignificant, and also non-compatible to IBM’s way of doing business. An observer stated that “IBM bringing out a personal computer would be like teaching an elephant to tap dance.”
In 1980 IBM’s least-expensive computer, the 5120, still cost about $13,500. In conceiving PC, IBM considered using the IBM 801 RISC processor and its operating system, developed at the Thomas J. Watson Research Center. The 801 processor was more than an order of magnitude more powerful than the Intel 8088, and the operating system was more advanced than the PC DOS 1.0 operating system from Microsoft. To speed up the process and avoid the collision with IBM’s internal culture of innovation, the PC team ruled out an in-house solution. But if IBM had predicted the unfolding future of PC with much higher accuracy, the decision of outsourcing processors to Intel and operating systems to Microsoft could have been reversed. Such IBM’s failure to predict created two giants over the span of 30 years—Microsoft and Intel.
IBM’s failure to predict the future of Simon left the Opportunity for Apple:
IBM made another major mistake in predicting the growth of keyboard-less smartphones. In 1992, IBM debuted a prototype device, at the COMDEX computer and technology trade show. The prototype combined a mobile phone and PDA into one device. It allowed a user to make and receive telephone calls, facsimiles, emails, and cellular pages. Not only did the prototype have many PDA features including a calendar, address book, and notepad, but also demonstrated other applications such as maps, stocks, and news. This was the precursor of IBM Simon Personal Communicator, the first PDA with telephony features.
BellSouth Cellular sold approximately 50,000 units of Simon during the product’s six months on the market. Although the term “smartphone” was not coined until 1995, because of Simon’s features and capabilities, it has been retrospectively referred to as the first smartphone. IBM’s prediction inaccuracy about the likely future of the keyboard-less design of smartphones left the opportunity to Steve Jobs to exploit after almost a decade—making dying Apple the most valued company.
Xerox’s failure to predict the future of GUI made Apple a giant:
Both Apple and Microsoft leveraged graphical user interfaces (GUI). It created the appeal of their software applications running on personal computers, whether IBM compatible PCs or Apple’s computers. But none of them invented the underlying technology. Along with them, several vendors have created their own windowing systems based on independent code. They kept basic elements in common that define the WIMP “window, icon, menu and pointing device” paradigm.
This WIMP technology took the shape at Xerox PARC laboratory in the late 1960s and early 1970s. In 1973, Xerox PARC developed the Alto personal computer. It had a bitmapped screen and was the first computer to demonstrate the desktop metaphor and GUI. It was not a commercial product; but several thousand units were built and were heavily used at PARC, as well as other XEROX offices; several universities also used them for many years. Unfortunately, Xerox failed to predict the likely future of the WIMP technology fueling the GUI innovation-based personal computer industry. Due to this failure, Xerox virtually could not make a penny; but this technology fueled the creation of two giants—Apple and Microsoft.
Technology forecasting failures lead to loss of opportunities and suffering from destructive effects:
Technology forecasting is vital, both for benefiting from the unfolding future opportunities. It is also vital to avoid catastrophic consequences. Technologies like transistors, CCD, PC, and WIMP were opening new opportunities. The threat also started compounding along with the growth of those technologies. By spotting the possibility of transistors and CCD, Sony became a success story. By failing to predict the likely future, RCA and Kodak failed to leverage. Most importantly, they suffered from colossal destructive forces. Similarly, by failing to predict the growth of PC, IBM gave the opportunity to the growth of two new giants in the computer industry. Unfortunately, their growth pushed IBM towards bankruptcy. Due to the prediction failure of WIMP, although Xerox did not suffer from disruptive forces, the company lost the opportunity to earn money out of WIMP’s invention.
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