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The Disruptive Transistor Radio

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JEALOUS of her
Transistor Radio

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Christian Sandström holds a PhD from Chalmers
University of Technology, Sweden. He writes and speaks
 about disruptive inn...

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Radios
 used to be
FURNITURE

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The Disruptive Transistor Radio

  1. 1. JEALOUS of her Transistor Radio
  2. 2. Christian Sandström holds a PhD from Chalmers University of Technology, Sweden. He writes and speaks about disruptive innovation and technological change.
  3. 3. Radios used to be FURNITURE
  4. 4. They were big and beautiful…
  5. 5. … And stood in the living room…
  6. 6. ”At the dearest place in Your Home….”
  7. 7. And the radios were sold in special stores…
  8. 8. In 1955, a company called Tokyo Tsushin Kogyo introduced a Transistor Radio
  9. 9. It was named SONY
  10. 10. The ’furniture radios’ used Vacuum tubes, and therefore they were big and demanded a lot of energy.
  11. 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. 12. Sony dealt with discount stores like Woolworth which did not have any service departments.
  13. 13. The Transistor Radios were smaller, cheaper and demanded less energy…
  14. 14. The ’SONY’ became a great success and therefore Tokyo Tsushin Kogyo changed its name to SONY
  15. 15. Initially Transistor Radios did not threat the big radios, simply because it prospered in a new market.
  16. 16. It was a New Market Disruptive Innovation, a product that would prosper in a new market and then later on invade the established market.
  17. 17. Let’s take a look at the marketing of transistor radios…
  18. 18. Home transistor An ideal, portable, ’second radio’ and for your summer house
  19. 19. A Beach Radio!
  20. 20. Look at the names! It’s a lifestyle product!
  21. 21. Auto Radio – it’s a new application!
  22. 22. LUXOR Travel Radio
  23. 23. None of them focus on Good Sound!
  24. 24. The reason is very simple…
  25. 25. Compared to the old, big radios, the sound wasn’t good.
  26. 26. But the sound was GOOD ENOUGH to enjoy.
  27. 27. Now let’s look at the marketing of big radios…
  28. 28. ’If You want good sound - Ask for Radiola’
  29. 29. So, the established Radio companies focused on sound, sound and sound…
  30. 30. … While transistor radios prospered in new markets.
  31. 31. … In 1957 they were small enough to fit into the pocket.
  32. 32. In the 50’s and 60’s the market for transistor radios exploded!
  33. 33. Virtually everyone had a transistor radio and it became a cult product.
  34. 34. The Beach Boys released a song called ’Magic Transistor Radio’.
  35. 35. Benny Hill, the famous English entertainer wrote a song called Transistor Radio in 1961 (Listen here):
  36. 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. 37. “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…”
  38. 38. “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“
  39. 39. The Transistor Radios were so popular that by 1959 there were about 12 million in use…
  40. 40. Soon, there were more of them than there were households in the United States!
  41. 41. And well, as the sound quality improved gradually there was no reason any longer to buy a furniture radio…
  42. 42. … All of a sudden, it was impossible to sell big radios on sound, sound and sound…
  43. 43. Transistor Radios were now cheaper, portable, consumed less energy, and had a sound which was as good and soon even better!
  44. 44. The furniture radios now left the market rapidly and the disruption was accomplished…
  45. 45. And with these radios, many special Radio Stores also left the market, because there were no radios to repair…
  46. 46. Sony was initially not regarded as a threat, since they satisfied a market that had not existed previously.
  47. 47. Sony targeted Non-consumers and created a huge market!
  48. 48. And who would regard Non- consumers as a threat?
  49. 49. Some estimates suggest that there are 7 billion transistor radios in use today. What a huge New Market Disruptive Innovation!
  50. 50. So, this story tells us that: By targeting Non-consumers, huge markets can be created and disruptions may occur later on.
  51. 51. And it reminds us of the crucial question...
  52. 52. … What is GOOD ENOUGH?
  53. 53. 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/
  54. 54. Photos taken at: Radiomuseet i Jönköping: http://www.radiomuseet.com/ Thank You!
  55. 55. Find out more: www.christiansandstrom.org

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