The iPhone Did Not Disrupt the Mobile Handset Industry

Yesterday, I wrote about how smartwatches would be a sustaining innovation relative to the watchmaking industry, but instead by a disruptive innovation relative to the smartphone industry.

To illustrate my point, I described how smartphones were a sustaining innovation (and not disruptive) to the mobile handset industry, and how smartphones were instead disruptive to PCs.

Since many people will understandably have an issue with smartwatches disrupting smartphones, I think I should go into a bit more detail. Instead of going into logic, I will give my understanding of what happened when the iPhone entered the market (Christensen’s mistake) and examine the parallels with the Apple Watch.

  1. Smartphones did not disrupt the mobile phone market: Many people think that the iPhone disrupted the mobile phone market. Disruption means that new entrants successfully displaced the incumbents. While this is certainly true that one entrant, Apple, gained 8.4% market share of total mobile phones, if you look at the other players, the mobile phone market is still mostly comprised of incumbent companies that used to sell feature phones. These companies were fortunate that Google provided Android for free, so that they could easily and quickly develop their own smartphones. Some may note that Blackberry and Palm almost completely disappeared. I would argue that if you look at the total mobile phone market, they were never more than a small niche so they weren’t really incumbents at all. As for Nokia, they simply bet the company on the wrong horse. If they had chosen to use Android, there is little doubt that they would have still been a force to reckon with.
  2. Smartphones disrupted PCs: To understand this, you have to lump smartphones and PCs together to create a “personal compute market”. Ben Bajarin has done this, and the following chart shows what has happened. PCs have clearly been overrun, and importantly, neither Microsoft itself nor any of the PC OEMs (with the exception of Lenovo which is very agile at M&A) successfully made the transition to smartphones. This is what disruption looks like.
    Ben BajarinさんはTwitterを使っています Microsoft s journey of computing platform share through the years http t co taFsFr1sZp

Here, I’d like to look at this in a bit more detail. The thing is that if we take a look at the mobile handset industry before and after the iPhone, there certainly has been movement in the dominating players. At first glance, it would look like there has been some kind of disruption. However, as I will point out below, the truth is that disruption came from cheap Asian manufacturers and not from Apple.

Gartner Says Worldwide Mobile Phone Sales Increased 16 Per Cent in 2007
Source: Gartner 2007

Gartner Says Sales of Smartphones Grew 20 Percent in Third Quarter of 2014
Source: Gartner 2014

The Handset Industry Was Disrupted By East Asia

In the above tables, we see Nokia’s rapid decline and Samsung’s ascent. We also see Motorola and Sony Ericsson disappearing from the scene whereas LG maintained its position. Huawei, TCL, Xiaomi and other Chinese and Indian OEMs rose quickly.

This is the combination of a few of events;

  1. Korean manufacturers rapidly grew their presence, overtaking Western and Japanese firms. Korean companies simply made high quality devices and components cheaper than their rivals.
  2. Mobile handset users in both China and India exploded. To cater to these huge markets, homegrown companies sprung up and were successful. The rise of Chinese and Indian manufacturers is simply a result of the explosion of these markets.
  3. Nokia made a very large bet on the wrong technology. Nokia correctly understood that it would not be able to differentiate if it went with Android. However, there was not yet a good alternative OS so Nokia decided to bet on Windows phone in the hope that it would arrive in time. It didn’t. I’m sure that few people would disagree that Nokia would still be relevant if they had adopted Android.

Regarding item 1), this is exactly what Japan did in the 1960s and 1970s, disrupting US electronics and automobile manufacturers. Emerging industrialised nations capitalise on cheap labour and new factories to create high quality products at low cost. Just as Japan initially started out as a cheap, low-quality manufacturer, but quickly moved up the ladder to become a high-quality one, so has Korea in the last decade. The rise of Samsung in particular is simply a consequence of this.

The role of Apple in this is that it created a shake-up. It created a fast changing environment where every company was scrambling to produce a device capable of competing with the iPhone. These environments typically favour quick-moving entrants which have nothing to lose. In the case of Japanese electronics companies, it was the transition to transistors that shook up the environment. In automobiles, it was the oil shock that shifted attention to more efficient cars. Likewise, the iPhone did not directly disrupt the phone industry but instead created a volatile situation which the Koreans could then exploit.

Regarding item 2), this is again very obvious. When the vast majority of smartphone hardware is being made in China anyway, it is natural that Chinese firms would create their own brands. The iPhone has nothing to do with this.

Summary

  1. The iPhone did not disrupt the mobile phone industry.
  2. The mobile phone industry was disrupted from the low-end by Korean manufacturers which were climbing up the ladder from cheap, low-quality to cheap, high-quality.
  3. The iPhone only served as a catalyst for change. It did not directly influence the direction of the shift.

Quick Take on Disruptive Potential of Smartwatches

Just a few quick notes on the disruptive potential of smartwatches.

Smartwatches will not be disruptive to watches

This is very important. This tells you who will be the main players in the smartwatch market in the mid- to long-term. Smartwatches add features to traditional watches, and will often be more expensive than comparably built watches. Therefore, it makes perfect financial sense for incumbent watch makers like Seiko, Citizen, Swatch, Tag Heuer, Casio, and others to make a smartwatch. We are already witnessing this. If incumbents are motivated to fight back, the probability of an entrant being successful is greatly diminished.

Whether the incumbents (traditional watchmakers) can succeed in making a good smartwatch is another question, but given that the operating system is already freely available as Android Wear, and that the Shenzhen ecosystem should give them the electronic components that they need, it is likely that despite not having prior excellence in electronics, incumbent watch manufacturers will be able to create smartwatches that are almost as good as the ones coming out of Samsung, LG, Motorola, etc. Since brand and design are very important for selling wearables and that there is no easy way for entrants (smartphone OEMS) to acquire a strong brand image (i.e. they don’t sell strong brand images in Shenzhen), it is likely that the incumbents (traditional watchmakers) will prevail in the smartwatch space.

Smartwatches will be disruptive to smartphones

Instead of being disruptive to watches, smartwatches will be disruptive to smartphones. Smartwatches will make many of the smartphone computing tasks more convenient and easier to accomplish. Although their current functionality is rather limited, it is very likely that advances and innovations in both hardware and software will quickly expand the scope of tasks that we can accomplish with smartwatches.

For the most part, this will be a new-market disruption as opposed to a low-end disruption. In low-end disruption, you would typically target the least demanding customers. However, in the current format, smartwatches will depend on the user also having a smartphone nearby. A typical user will need both a smartphone and a smartwatch, so they will not be the least demanding customer.

Instead, smartwatches will be new-market disruptions. They will enable customers to interact with computers and the Internet in ways that were previously impossible or cumbersome.

Now in the previous section, I argued that traditional watchmakers will prevail in the smartwatch market. They will gain share of the total compute time per user. The question then is, who will lose share? Who will be disrupted by this new market disruption? My argument is that here the incumbents are smartphones and that smartphones will be disrupted by smartwatches.

Without going into detail, this is what I expect the smartwatch landscape to look like after the dust has settled;

  1. Apple will be the undisputed number 1. They will aggressively innovate on the Apple Watch, even to the extent that it cannibalises the iPhone. The Apple Watch will gradually become more and more independent of the iPhone.
  2. The current Android smartphone OEMs will initially play in the smartwatch market, but they will fail to make profits due to their lack of brand power. Eventually most will retreat from the smartwatch market and focus on making big and powerful smartphones. The few that remain will only get the scraps from the very low-end of the market. The exception might be Samsung. If their Tizen operating system enables them to innovate faster than Android Wear, there is the possibility that Samsung will be able to profit from smartwatches (due to the lock-in they get).
  3. Current watchmakers will be the major Android Wear players in the smartwatch space, especially in profits. The electronics will be provided by the Shenzhen ecosystem or a chipset provider (maybe Intel). Depending on how well Google can monetise from Android Wear, we might see some rapid innovation.
  4. Smartwatches in general will become more and more independent of smartphones. Ultimately, people may not carry a smartphone but instead carry a MiFi-like cellular connection device paired to their smartwatch (due to the battery requirements of connecting to a cellular network). For tasks requiring a larger screen, customers might carry a tablet-like device. The theme here is that smartphones will be at least partially replaced by smartwatches.

Final thoughts

Clayton Christensen famously misunderstood the disruptive potential of the iPhone. He saw it as a sustaining innovation to feature phones, and expected the incumbents to quickly respond and shut out the new entrant (Apple). Part of his mistake is that he failed to see how the iPhone would be a new-market disruption, making PC tasks possible on a mobile device.

We should be careful not to repeat his mistake. We need to be careful in understanding to which markets smartwatches are sustaining, and to which markets smartwatches are disruptive. If we fail to correctly assess this, we will end up with the opposite prediction.

Here I make the potentially controversial prediction that the traditional watchmakers will prevail and that smartphone OEMs like Samsung, Motorola and LG will drop out of the market. This will be the measure by which my understanding of disruption theory should be judged.

Update

Since many people will understandably have an issue with smartwatches disrupting smartphones, I think I should go into a bit more detail. Instead of going into logic, I will give my understanding of what happened when the iPhone entered the market (Christensen’s mistake) and examine the parallels with the Apple Watch.

  1. Smartphones did not disrupt the mobile phone market: Many people think that the iPhone disrupted the mobile phone market. Disruption means that new entrants successfully displaced the incumbents. While this is certainly true that one entrant, Apple, gained 8.4% market share of total mobile phones, if you look at the other players, the mobile phone market is still mostly comprised of incumbent companies that used to sell feature phones. These companies were fortunate that Google provided Android for free, so that they could easily and quickly develop their own smartphones. Some may note that Blackberry and Palm almost completely disappeared. I would argue that if you look at the total mobile phone market, they were never more than a small niche so they weren’t really incumbents at all. As for Nokia, they simply bet the company on the wrong horse. If they had chosen to use Android, there is little doubt that they would have still been a force to reckon with.
  2. Smartphones disrupted PCs: To understand this, you have to lump smartphones and PCs together to create a “personal compute market”. Ben Bajarin has done this, and the following chart shows what has happened. PCs have clearly been overrun, and importantly, neither Microsoft itself nor any of the PC OEMs (with the exception of Lenovo which is very agile at M&A) successfully made the transition to smartphones. This is what disruption looks like.
    Ben BajarinさんはTwitterを使っています Microsoft s journey of computing platform share through the years http t co taFsFr1sZp

Now if we apply this to the current smartwatch situation, we can expect the situation I described in 1) to happen to the current watchmakers, and the situation I described in 2) to happen to the current smartphone OEMs.

So for current watchmakers, they will quickly adopt the new emerging technology, and the freely available Android Wear will help them immensely. The Shenzhen ecosystem will also help on the hardware side.

On the other hand, smartphone OEMs will dabble in smartwatches in the same way that DELL and others briefly entered the smartphone market (Dell Streak 5, HP iPaq). Notice the bulkiness and inelegance of their offerings, which reminds me of the bulky and unfashionable Android Wear devices that we are currently seeing from Smartphone OEMs.

In a few years time though, I predict that smartphone OEMs will mostly exit from smartwatches, just like DELL and HP did. There seems to be something that holds back incumbents in the higher spectrum of the market from creating something that is simpler and more elegant.

Examples of Smartphone Specialization and Implications for Google’s Control

A while back, Bob O’Donnell wrote a piece on Techpinions titled “Tablet and Smartphone Futures: Specialization”.

Ultimately, technology products are likely to follow the path of other mass-produced goods, such as cars, appliances and even clothing. In all those markets (and many more), the ability to specifically target different types of consumers and then create products that match the unique needs/interests of those different consumers is what allows companies to thrive. Now, it’s time for technology companies to step up to those challenges and give us the breadth of product options that the market is hungry to see.

I very much agree with Bob’s point. The wider a product penetrates a market, the more diverse needs it will have to address. This is what has happened in almost all markets, and although personal computing devices are different in that customers can install software to customize to their preferences, there is little guarantee that this is sufficient to satisfy the very divergent needs.

Furthermore, diversification is not necessarily aligned with the interests of the platform owners. In the case of Apple, they try hard to control the experience on their devices. They minimize customization options in the name of simplicity. They try hard to find a single one-size-fits-all that works well. In the case of Google, the first started by allowing OEMs and carriers to customize the Android OS, but then scaled back when they felt they were losing control of the platform, and that fragmentation was becoming an issue for developers. It is clear that the platform owners are discouraging diversification.

What we are seeing is a natural tension between conflicting requirements. In this situation, small changes in the market could dramatically shift the balance of power. This is why I’m very interested in observing how specialized products will enter the market, and what level of success they will achieve.

One example that cropped up recently is the announcement of some very interesting Android smartphones from KDDI, the second largest carrier in Japan.

The first exhibit is a smartphone targeted towards primary school pupils (miraie KYL23). Apart from the hardware which is designed to withstand the constant abuse that one can expect from small children, it has good Web filtering features, and can even track what swearwords and insults your child may have typed-in. You cannot use Google Play or other Google Services; instead, you install apps from a specialize app store.

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Message pops up when you try to enter “ばか” (stupid). It tells you that you are using a bad word, and your parents will be notified.

When you think about it, it’s absolutely obvious that you don’t want to use a Google certified Android device on these smartphones, and you really have no choice but to go with AOSP.

As the smartphone market saturates and it becomes important to address the smaller niche markets, it is very likely that we will see even more customization. In this situation, the restrictions that Google applies for Google Play certification may be too limiting, and AOSP may see more adoption. Obviously, Apple will not play in this market.

Update

Importantly, the miraie KYL23 smartphone is manufactured by a Japanese smartphone vendor, Kyocera, which also sells Google certified smartphones. Therefore, although it has been rumoured that Google does not give out licenses to companies that also sell AOSP or forked-Android, this does not always seem to be the case.

64-bit Android Is Starting To Hurt

Ever since the iPhone 5s was announced with a 64-bit processor, I have been watching when Android will move to 64-bit. My concern is that if Android does not move to 64-bit soon, the performance gap between Android and iOS may widen to a point where it becomes ridiculous to talk about “High-End Android”.

I initially thought that it would be a software issue; that Google would not commit itself to the high-end and would not be aggressive in moving the OS and applications to 64-bit. This has been true to a certain point. However, AppleInsider reports that the CPU hardware might be having an even harder time moving to 64-bit.

Following up on rumors in December that described “hard to solve” issues that Qualcomm was experiencing as it works to deliver its first mainstream 64-bit mobile chip, Bloomberg has now reported that Samsung “will use its own microprocessors in the next version of the Galaxy S smartphone.”

Citing “people with direct knowledge of the matter,” the new report said Samsung tested Qualcomm’s Snapdragon 810 but “decided not to use it.” Both companies have declined to address the issue publicly.

Two weeks ago, a research note by JP Morgan described the same overheating issue, explaining, “For the Snapdragon 810, a flagship chip for use in high-end models, we believe the issues are related to the implementation of new 64-bit ARM cores (A57), which is causing overheating when accelerating above 1.2-1.4 GHz frequencies, which is a major limitation for a flagship phone.”

This is starting to look very bad. It is starting to look like high-end Android will truly end up being a Samsung exlclusive.

Slow Adoption Of Android 5.0 Lollipop

It seems that three months since its release, the adoption of Android 5.0 Lollipop seems to be unprecedentedly slow.

Still, as can be observed from the graph below, three months into its existence KitKat somewhere around 2% was already present in a significantly higher number of devices than Lollipop currently is.

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Compared to previous major upgrades of Android, Lollipop is quite big. It renews the UI design (Material Design) from Holo which has been in use since Android 3.0 (2011), it features a new ART runtime that replaces Dalvik which has been in use since, the beginning and it also has support for 64-bit devices. Lollipop is brand new in many ways, and I thought that Google would try very hard to drive quick adoption.

This clearly hasn’t been the case. I strongly doubt that this was intentional.

A bit worrisome.

Short Note on App Store vs. Google Play Revenue

As Benedict Evans wrote in his weekly newsletter, Apple reported its revenue from the app store in 2014.

Apple reported that app store revenue net of its 30% commission was $10bn in 2014. This is actually the same as the figure it gave at WWDC in the summer for the previous 12 months – I suspect there’s some rounding going on. Apple’s commissions on this would be about 2% of CY 2014 revenue.

Apple announcement link

Although we will not know exactly what the rounding error was, given the very strong growth of the app store in the past, it is quite difficult to believe that sales have suddenly flattened out. So to get a better picture, I decided to provide an update to my series of articles on the iOS App Store vs. Google Play (most recent one is here).

In that article, I lamented that App Annie was not giving out the actual growth of neither the App Store nor Google Play and as such, it was impossible to see whether the revenue gap was closing in absolute terms.

Since then, App Annie has reported its Portable Gaming Spotlight, 2Q14 report in conjunction with IDC. This report gives us a direct answer.

Screen Shot 2015 01 13 22 12 07

As you can clearly see, iOS App Store absolute revenue growth is larger than Google Play absolute growth. Although Google Play is doing remarkably well on a YoY percentage basis (>+100%) compared to iOS App Store (+70%), it is not closing the gap at all.

Also you have to keep in mind that Google Play revenue is increasingly games. In fact, App Annie notes in their Q3 2014 report that, “Games drive nearly all Google Play Revenue Growth”. This is presumably not the case with iOS which suggest that the gap between the App Store in Google Play revenue is wider and also growing if we include non-game apps.

Actually, my view is that the difference in non-game app category is more interesting than the total difference. It’s likely that by now, iOS has about 6-times more non-game revenue than Android. This means that apps like Byword, RunKeeper and others which are either paid-apps or in-app payment apps are struggling on Android.

Overhyping the Revenue Potential of the Emerging Countries

A beautiful infographic on the state of App Stores by App Annie.

Unfortunately, I can’t agree with the title “Mobilizing the Next 5 Billion”. If anything, this infographic tells us how dominant the “app store superpowers”, Japan, South Korea and the United States are. These superpowers are not only dominant in current revenue, but also have revenue growth that is equal to the emerging countries. This means that the emerging countries are not catching up; instead the lead of the superpowers is widening.

The infographic tells us that the superpowers will remain dominant in revenue for the foreseeable future. The next 5 billion is unlikely to contribute significantly to total revenue from app stores for quite a while.


Infographic GMIC 11182014 2

Material Design and Opaqueness

I’ve been playing around with Material Design for a few days, and the most striking thing for me is the opaqueness. This is in stark contrast to iOS 7 and iOS 8.

Since iOS 7, Apple has gone to significant lengths to make the toolbars at the top and bottom of the screen translucent. To do this without decreasing the legibility of the frontmost element, Apple uses a frosted glass effect which is apparently quite computationally expensive and is not used in less powerful devices (for example, the iPad 2 reverts to simple transparency for some elements). Apple has mentioned that the goal was to make the underlying content stand out and to minimize distraction from the control UI elements. You also see a lot of iOS apps using gray toolbars, which also helps to emphasize content instead of the app.

On Material Design however, they do not use translucency anywhere. Everything is an opaque surface, just as paper is opaque. Although Material Design emphasized depth and the z-axis, this is conveyed solely through the use of shadows.

The feeling of opaqueness is further fortified by the use of bold colors for UI controls. Whereas iOS apps often use only a humble gray color as the background for the UI controls, Material Design encourages bold colors. The effect is that the toolbar and buttons make a very strong impression and feel omnipresent, a sense of opaqueness.

The new iOS design and Material Design feel very different. iOS feels very light. Material Design looks a bit heavy on the top.

Although opaqueness itself is neither good nor bad, in terms of the history of computer UI design, it does feel a bit backward. It feels like going back to the Windows XP days since every PC-OS since then has used translucent elements. The bold colors of Material Design are also reminiscent of the vivid toolbars of that OS, which fell out of fashion since. Similarly, iOS moved from an opaque design to a translucent design. I am wondering if the absence of translucency in Material Design is a result of having to make it work well on cheap devices which don’t have good GPUs.

iOS WWDC 2014 app

Note the translucency on the leftmost image, on the bottom toolbar.

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Google I/O 2014 app

Running on KitKat but using Material Design.

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Will High-End Android be a Samsung Exclusive?

I have been very wary of Google’s efforts to build in the tools that Android requires to compete with Apple in the high-end smartphone market. My feeling has been that Google is no longer interested in the high-end smartphone market and is satisfied to let Apple have it. Instead, Google is focusing on the low-end market and on bringing low-cost smartphones to the emerging markets.

Recent announcements reinforce my thinking.

On Nov 13, 2014, Samsung and BlackBerry announced a partnership to build and market a tightly integrated, end-to-end secure solution aimed for enterprises. It is well known that Apple dominates corporate market share in smartphones and tablets, and security is one of the reasons why Android is struggling. The interesting thing is that Google seems very uninterested in developing a solution of their own for this quite lucrative market.

At the keynote of Samsung Developer Conference 2014, Samsung introduced Samsung Flow, which is basically their version of Apple’s Continuity features. The important thing to note is that Continuity is a feature that is only valuable for customers who can afford multiple devices. Again, why did Samsung and not Google develop this? Is it because Google is relatively uninterested in the customers who are wealthy enough?

Samsung recently announced its answer to Apple’s iBeacon feature, Proximity. This is a technology to enhance customer experience at stores, mall, stadiums, museums, etc. and also push you special offers and stuff. As stores embrace iBeacons, there was the possibility that some of the offers would end up being exclusive for iPhone users. Now it will be exclusive to iPhone and Samsung users. Why wasn’t Google interested?

If this continues, Samsung might create a rather formidable barrier-to-entry for the high-end Android market, blocking HTC, LG, Lenovo and others from competing.

Although I do suspect that the overall market for high-end Android devices might shrink, I do not doubt that Samsung will continue to dominate for the foreseeable future.

How Apple Has Actually Introduced New Category Products Every Few Years

There are several people who seem to have had difficulty applying Clayton Christensen’s Disruption Theory to the tech world, and have proposed that this theory itself does not apply to either the tech market or consumer goods. However Horace Dediu, who is now working for the Clayton Christensen Institute specifically for the task of applying Disruption Theory-based analysis to the tech market, has argued in a podcast with Ben Bajarin, that there is no reason why it cannot be done. Horace argues that the challenge lies in defining what constitutes the “jobs-to-be-done”, and a failure to do this successfully is why Disruption Theory sometimes seems to fail.

This point is very important and is worth reiterating. The reason why Disruption Theory occasionally fails to explain a certain situation is not because the theory itself is limited in its scope; it is because identifying the jobs-to-be-done is extremely difficult. In fact in the typical example of the jobs-to-be-done, the milkshake example, the jobs-to-be-done is so unintuitive that its unlikely that even an industry expert would have accurately predicted it. It is no wonder that Clayton Christensen himself failed to predict how Disruption Theory would affect Apple.

More often then not, the people who attempt to expand, supplant or even discredit Disruption Theory have simply neglected to carefully analyze the jobs-to-be-done.

To further complicate things, if you look at the brief history of personal computing, which has only been with us for four decades at most, you can also observe that the jobs-to-be-done has shifted extremely rapidly. At most, a certain jobs-to-be-done will be mainstream for only five years.

For example, the PC started out in the Apple I era as a hardware hobbyist’s kit. With the Apple II, the PC was now a platform for a hobbyist software programmer. Then with the advent of packaged software like VisiCalc, the PC became a business tool for performing large numbers of calculations. With the arrival of the Macintosh and the Laser Writer, the PC now became a tool for creative professionals, and then with the Internet, it became a tool for communication and collaboration. After the year 2000, the PC became a tool to manage digital photos, music and video.

With each shift in the jobs-to-be-done, the required hardware specifications to sufficiently perform the task increased. At the same time, the customer base continuously expanded to less tech-savvy users which required the user interface to improve. This meant that the PC rarely reached the good-enough threshold because the bar was constantly being raised.

The exact same thing can be said for smartphones. The original iPhone started out as a phone, an iPod and an Internet communicator. In a short amount of time, it quickly became your main camera, your gaming console, your map, your photo album, your fitness tracker, your newsreader, the pacifier for your kids, your TV and so much more. And now with Touch ID and Apple Pay, Apple is making your iPhone your ID and credit card. From its initial humble jobs-to-be-done, the smartphone is now the center of a huge portion of your life. The jobs-to-be-done of smartphones has exploded.

And as with PCs, each shift in the jobs-to-be-done has required new and better hardware. Being your main camera has demanded better optical and image processing hardware and software. Being your gaming console has demanded better 3D graphics performance which technologies like Metal and better embedded GPUs can provide. Being you fitness tracker has resulted in technologies like the M7 motion co-processor which can constantly track your movements with minimal battery drain. And of course Touch ID and Apple Pay required new biometric hardware.

By now it should be plainly obvious why Apple has avoided being disrupted; Apple has consistently been at the forefront of the shifts in the jobs-to-be-done in personal computing (except for the years when Apple was run by John Sculley and R&D was run by Jean-Louis Gassée). That is why new Apple hardware has constantly been in high demand and can still command a high premium.

On the other hand, the reason why Samsung is being disrupted at the low-end is because Android is not expanding the frontiers of smartphone jobs-to-be-done. Other than UI tweaks that work equally well on less capable devices, Android has recently failed to introduce compelling features that require new or better hardware. In fact, this might have been intentional on Google’s part as an initiative to reduce fragmentation. As a result, Android phones have become as good-enough as they can be, even on the hardware that can be bought for $200-300. The Android OS is holding Samsung back.

This also means that Apple products will be disrupted if they start failing to create new jobs-to-be-done. It also means that the resurgence of the Mac could be attributed to a new jobs-to-be-done that the Mac can uniquely satisfy. Strong integration with iPhones could obviously be one of these jobs-to-be-done which is not available on Windows PCs.

Actually, if you look at computing from a jobs-to-be-done standpoint, the idea of a “new category” device starts to look rather ridiculous. It becomes clear that the emphasis should be on whether or not a new jobs-to-be-done has emerged. Sometimes this might require a new device, but oftentimes, it simply requires new hardware on top of a preexisting device. This in itself is sufficient to transform the previous hardware into a new category device. For example, Touch ID has transformed the iPhone into a digital ID and wallet with unprecedented security and convenience, something that was hitherto impossible with a smartphone. Focussing solely on new category devices is completely missing the point.

In fact you could even argue that every few years, Apple has introduced a new category product in the guise of the iPhone or a new iOS version; a product that enables new jobs-to-be-done to emerge.