My contention is that app time will impact many of these incumbent media and that both the effect and the consequences will be hard to measure in advance or even ex post facto. These new media objects are not measured easily and therefore are flying under the radar of traditional metrics used by the industry. Such absence of reliable measurement is one of the hallmarks of a disruptive shift in industry: You can’t perceive what you can’t measure and you certainly can’t manage it.
Horace Dediu thinking about the Apple’s M7 chip:
Perhaps this is why Apple chose to describe the iPhone 5s as “forward-thinking”. The M7 and the Touch ID are like research projects whose actual value will be realized at some future time, in probably different contexts. The M series of chips may become Apple’s “low end” microprocessor as the A series climbs the trajectory into core computing tasks (read: phone, tablets, TV, laptops).
M might be the chip for the wearable segment, woven into a whole new fabric of uses and jobs to be done.
Asymco says 45% and adds:
The real problem for the PC vendors is not that they have such low margins–they’ve had low margins for decades. It’s that the volumes which “made up for” low margins are disappearing.
Horace Dediu asks this question from the viewpoint of disruption theory, where if you are trying to make better something, that’s good enough from perspective of some customers, you are creating a room for being disrupted.
The clue to this experiment is the presence of a control group. We could test the question of absorbability by by keeping a version of the product which did not improve (or got cheaper) and measuring whether is performs better vs. the “improved” version.
Of course, this is exactly what Apple does with the n-1 generation products. By ranging products which are older and at lower price points it can measure whether the improvements are valued.
Horace Dediu reports:
My thanks to Adam Lashinsky of Fortune for inviting me to Fortune Brainstorm Tech in Aspen this week. I was asked to participate in a panel session with Gene Munster of Piper Jaffray to discuss “The Future of Apple”. The session was moderated by Adam.
As we just passed 5 year anniversary of iPhone going on sale it’s fitting to look back.
So the iPhone seems to be correctly classified as a sustaining innovation. Something that moves the phone market forward and which, except for a temporary misallocation of profits, will entrench the incumbents after they manage to copy it effectively.
However, here is where we have to dig a little deeper.
Yesterday’s reveal of Surface, Microsoft’s first personal computer, was a watershed event in the evolution of value chains around computing.
And so we can see value chains evolving in real time before our very eyes. They have always evolved but in technology industries they evolve far more rapidly and will continue to accelerate.