Strategy. Innovation. Brand.

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Innovation Assimilation

Next?

Next?

In 1983, when I was a product manager at NBI, we were second only to Wang in the word processing and office automation market. Then along came the personal computer and disrupted Wang, NBI, CPT and every other vendor of dedicated word processing equipment.

I’ve written about this previously as an example of disruptive innovation. But I could also describe it as assimilative innovation. NBI’s products did one thing – word processing — and did it very well. The PC, on the other hand, was multifunctional. It could do many things, including word processing (although not as well as NBI). The multifunction device assimilated and displaced the single function device.

We’ve seen many examples of assimilative innovation. When I bicycled across America, I bought a near-top-of-the-line digital camera to record my adventures. It took great pictures. It still takes great pictures. But I hardly ever use it. My smartphone does a lot of things, including taking great pictures. Though my smartphone’s pictures are not as good as my camera’s, they’re good enough. Additionally, the smartphone is a lot more convenient.

Years ago, the automotive industry produced an odd example of innovation assimilation. American cars had a big hole in the dashboard (fascia) where you could slot in a radio and cassette player. You were supposed to buy the audio equipment from the car manufacturer but consumers quickly figured out that they could get it cheaper from after-market vendors.

So, did the auto manufacturers lower their prices? No way, Instead, they re-designed their dashboards so that the audio equipment came in several pieces that an after-market vendor couldn’t easily mimic. In other words, the manufacturers tired to assimilate the competition.

In this case, it didn’t work. The after-market vendors sued, claiming illegal restraint of trade. The courts agreed and ordered the manufacturers to go back to the big hole in the dashboard. I suspect this was a precedent when Nestlé sued to stop third-party vendors from selling coffee capsules for the popular Nespresso coffee maker. Nestlé lost. The courts ruled that Nestlé had created a platform that allowed for permisionless innovation.

What will be assimilated next? I suspect it’s going to be fitness bands. I wear the Jawbone band on my wrist to keep track of my activity and calories. It’s pretty good and seems to compete well with three or four other fitness bands on the market. The new Apple Watch, however, appears to have similar (or even better) functionality built into it. The Apple Watch is, of course, multi-functional. If history is any guide, the multi-functional and convenient device will displace the single purpose device, even if it doesn’t offer better functionality.

What’s the moral? When you buy a single function device, be aware that it’s likely to be assimilated into a multi-function device in the future. That’s not a bad thing as long as you’re aware of the risk.

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