Innovation means a new idea, device or process. It is innovation that keeps improving the quality of human life. Within this broad concept, there is another specific term which describes a process by which a product or service takes root initially in simple applications at the bottom of a market. Then, it relentlessly moves up market, eventually displacing established competitors. This isdisruptive innovation, a term coined by Clayton Christensen.
Naturally, I associate this term with The Apple Watch, which will be released in 2015. I think it as an example of disruptive innovation, and my analysis tells me it has huge market potential. Accordingly, it can be superbly profitable. Why? Here are my reasons:
(Image from Geogle.com )
Firstly, compared to the existing high-end watches, such as Breguet, the price of the iwatch is far cheaper, which is estimated around $ 350. In spite of charging a lower price to their target customers at the bottom of the market, Apple will achieve great profitability by increasing the sales of its product.
Secondly, compared with other smart watches, for instance, Samsung Gear series. The Apple Watch has some competitive advantages. For example, it has “ Digital Touch”, which allows you to send messages to loved ones who also wear Apple Watches. It is not only a function but also a brilliant marketing strategy that can encourage people to buy the iwatches. The strategy is also the same rationale behind the idea of Messages to iphone. In addition, the Apple Watch supports NFC payments providing paying convenience to consumers.All in all, the disruptor is Apple Watch. In constast, the disruptees are traditional watches. Will Apple Watch eventually displace the established competitors? Let’s see!
Sources:
http://en.wikipedia.org/wiki/Innovation
http://en.wikipedia.org/wiki/Disruptive_innovation
http://www.claytonchristensen.com/key-concepts/