The Disruptive Transistor Radio

1. JEALOUS of her
Transistor Radio

2. Christian Sandström holds a PhD from Chalmers
University of Technology, Sweden. He writes and speaks
about disruptive innovation and technological change.

3. Radios
used to be
FURNITURE

4. They were big and beautiful…

6. … And stood in the living room…

7. ”At the
dearest
place in
Your
Home….”

8. And the radios were sold in special stores…

9. In 1955, a company called Tokyo Tsushin
Kogyo introduced a Transistor Radio

10. It was named SONY

11. The ’furniture radios’ used Vacuum
tubes, and therefore they were big
and demanded a lot of energy.

12. 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.

13. Sony dealt with
discount stores
like Woolworth
which did not
have any
service
departments.

14. The Transistor Radios were smaller,
cheaper and demanded less energy…

15. The ’SONY’ became a great success
and therefore Tokyo Tsushin Kogyo
changed its name to SONY

16. Initially Transistor Radios
did not threat the big radios,
simply because it prospered
in a new market.

17. It was a New Market
Disruptive Innovation, a
product that would prosper
in a new market and then
later on invade the
established market.

18. Let’s take a look at the marketing
of transistor radios…

20. Home transistor
An ideal, portable, ’second radio’
and for your summer house

22. A Beach Radio!

24. Look at the names!
It’s a lifestyle product!

25. Auto Radio – it’s a
new application!

26. LUXOR
Travel Radio

27. None of them focus on Good Sound!

28. The reason is
very simple…

29. Compared to the
old, big radios, the
sound wasn’t good.

30. But the sound was GOOD
ENOUGH to enjoy.

31. Now let’s
look at the
marketing
of big
radios…

32. ’If You want good sound -
Ask for Radiola’

36. So, the established Radio companies
focused on sound, sound and sound…

37. … While transistor radios
prospered in new markets.

38. … In 1957 they were small
enough to fit into the pocket.

39. In the 50’s and 60’s
the market for
transistor radios
exploded!

40. Virtually everyone had a transistor
radio and it became a cult product.

41. The Beach Boys released a song
called ’Magic Transistor Radio’.

42. Benny Hill, the famous
English entertainer
wrote a song called
Transistor Radio in
1961 (Listen here):

43. “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”

44. “Well now
just 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…”

45. “I’d like to take her
transistor radio
And throw it in
the deep blue sea
I’m so jealous of her
transistor radio
Cause it takes her
mind off me“

46. The Transistor Radios
were so popular that by
1959 there were about
12 million in use…

47. Soon, there were
more of them than
there were
households in the
United States!

48. And well, as the sound quality improved
gradually there was no reason any longer to
buy a furniture radio…

50. … All of a sudden, it was impossible to sell
big radios on sound, sound and sound…

51. Transistor Radios were now
cheaper, portable, consumed less
energy, and had a sound which was
as good and soon even better!

52. The furniture radios now left the
market rapidly and the
disruption was accomplished…

53. And with these radios, many special
Radio Stores also left the market, because
there were no radios to repair…

54. Sony was initially not regarded as a
threat, since they satisfied a market that
had not existed previously.

55. Sony targeted Non-consumers
and created a huge market!

56. And who would regard Non-
consumers as a threat?

57. Some estimates suggest that there are 7 billion
transistor radios in use today.
What a huge New Market Disruptive Innovation!

58. So, this story tells us that:
By targeting Non-consumers, huge
markets can be created and
disruptions may occur later on.

59. And it reminds us of the crucial question...

60. … What is GOOD ENOUGH?

61. Image Attributions
http://www.flickr.com/photos/96979971@N00/110830957/
http://www.flickr.com/photos/danailaadrian/1311477408/
http://www.flickr.com/photos/simplylafra/2387899450/
http://www.flickr.com/photos/44124324682@N01/2166509550/
http://www.flickr.com/photos/roadsidepictures/315468558/
http://www.flickr.com/photos/roadsidepictures/2221686905/

62. Photos taken at:
Radiomuseet i Jönköping:
http://www.radiomuseet.com/
Thank You!

63. Find out more:
www.christiansandstrom.org