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The great calculator war

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How electronics caused massive entry to the calculator industry in the 1970s.

How electronics caused massive entry to the calculator industry in the 1970s.

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  • 1. As calculators became electronic in the 1960s and1970s the industry experienced an explosive growth.
  • 2. Here are some statistics on the growth, along with some predictions made in 1970 (in thousands).
  • 3. Virtually all manufacturers of mechanical calculators had collapsed by 1972. p y
  • 4. But what about all the entrant firms that sought to exploit this stunning growth?
  • 5. Especially p y in Japan, many fi firms soug t sought to enter thisindustry di d t and exploit the growing market.
  • 6. It was the introduction of integrated circuits that created a rapid decrease in prices and increase in performance.
  • 7. This shift and later the introduction of a calculator on a chip in 1971 had a huge impact on the industry structure.
  • 8. In the mechanical era, the industry was vertically integrated. Firms had their own sales organizations…
  • 9. … And manufactured their own mechanical components.
  • 10. In the electronic era, the components were made bysemiconductor firms such as Rockwell and Fairchild.
  • 11. And calculators were no longer sold in special stores byfirms maintaining strong relationships to business customers customers. Instead, they were sold in bookstores, or by discount retailers, who could cope with the ever-growing volumes.
  • 12. As a consequence the barriers to entry were very low So consequence, low.while the market grew and consumers got better and better products each year, firm after firm collapsed.
  • 13. The early 1970s are therefore often referred to as ’The Great Calculator War’ where entrants flooded the market with War’, calculators and most of them went out of business, with Sharp and a few other companies as notable exceptions.
  • 14. Firms tend to enter growing industries in a Klondikemanner, but the outcome is often modest, simply because others are doing precisely the same thing.
  • 15. Christian Sandström wrote his PhD on technological discontinuities and the challenges they present for firms. He writes and speaks about disruptive innovation and technological change.More about Christian and his research: www.christiansandstrom.org

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