2. Christian Sandström holds a PhD from ChalmersUniversity of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
3. Radios used to beFURNITURE
4. They were big and beautiful…
5. … And stood in the living room…
6. ”At thedearestplace inYourHome….”
7. And the radios were sold in special stores…
8. In 1955, a company called Tokyo Tsushin Kogyo introduced a Transistor Radio
9. It was named SONY
10. The ’furniture radios’ used Vacuumtubes, and therefore they were big and demanded a lot of energy.
11. In order to sell transistor radios, Sony had to create a new channel. The Radio stores made money on repairing furniture radios and were therefore not interested in selling small, cheap transistor radios which did not generate service revenues.
12. Sony dealt withdiscount storeslike Woolworth which did not have any service departments.
13. The Transistor Radios were smaller,cheaper and demanded less energy…
14. The ’SONY’ became a great successand therefore Tokyo Tsushin Kogyo changed its name to SONY
15. Initially Transistor Radiosdid not threat the big radios,simply because it prospered in a new market.
16. It was a New Market Disruptive Innovation, aproduct that would prosper in a new market and then later on invade the established market.
17. Let’s take a look at the marketing of transistor radios…
18. Home transistorAn ideal, portable, ’second radio’ and for your summer house
19. A Beach Radio!
20. Look at the names!It’s a lifestyle product!
21. Auto Radio – it’s anew application!
22. LUXORTravel Radio
23. None of them focus on Good Sound!
24. The reason isvery simple…
25. Compared to theold, big radios, thesound wasn’t good.
26. But the sound was GOOD ENOUGH to enjoy.
27. Now let’slook at themarketing of big radios…
28. ’If You want good sound - Ask for Radiola’
29. So, the established Radio companiesfocused on sound, sound and sound…
30. … While transistor radiosprospered in new markets.
31. … In 1957 they were smallenough to fit into the pocket.
32. In the 50’s and 60’s the market for transistor radios exploded!
33. Virtually everyone had a transistorradio and it became a cult product.
34. The Beach Boys released a songcalled ’Magic Transistor Radio’.
35. Benny Hill, the famous English entertainer wrote a song called Transistor Radio in 1961 (Listen here):
36. “My baby’s got a transistor radio She takes it everywhere we go She takes it when we go out a-walking Even to a movie show”
37. “Well nowjust last night,in the pale moonlight I asked her for a kiss But instead of hearing her whisper sweet words of love All that I could hear was this…”
38. “I’d like to take hertransistor radioAnd throw it inthe deep blue seaI’m so jealous of hertransistor radioCause it takes hermind off me“
39. The Transistor Radioswere so popular that by1959 there were about 12 million in use…
40. Soon, there weremore of them than there werehouseholds in the United States!
41. And well, as the sound quality improvedgradually there was no reason any longer to buy a furniture radio…
42. … All of a sudden, it was impossible to sellbig radios on sound, sound and sound…
43. Transistor Radios were now cheaper, portable, consumed lessenergy, and had a sound which was as good and soon even better!
44. The furniture radios now left the market rapidly and thedisruption was accomplished…
45. And with these radios, many specialRadio Stores also left the market, because there were no radios to repair…
46. Sony was initially not regarded as athreat, since they satisfied a market that had not existed previously.
47. Sony targeted Non-consumers and created a huge market!
48. And who would regard Non- consumers as a threat?
49. Some estimates suggest that there are 7 billion transistor radios in use today.What a huge New Market Disruptive Innovation!
50. So, this story tells us that:By targeting Non-consumers, huge markets can be created and disruptions may occur later on.