The gamble

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Real Carpio So

Real Carpio So

Apple introduced the first PDA, the Newton. It bombed. The Sony eBook reader boasted the best e-ink technology; Amazon Kindle was nowhere yet on the horizon. This year, Samsung and LG, despite being pioneers, decided to stop production of 3D TV.

In HBR’s current issue, the article Right Tech Wrong Time argues that the failure or success of technology is dependent on the ecosystem of the industry where it intends to enter. This includes the existing technologies, support services, industry standards and government regulations.

One needs to ask: how much additional development is required before the technology becomes ready for commercial use? Simply put, how much money should one spend on a new technology for it to be accepted by the market?

The use of dot-matrix printers was a norm. But other than upgrades to yet another lethargic font, there is hardly any innovation. They were rapidly replaced by inkjet printers. The switch was swift as there was no need to change the operating platform. Ditto for LED bulbs versus incandescent bulbs.

There was hardly any challenge for the new technology, and the existing one has limited potential to challenge the threat.

Despite having the capacity to store far richer data than barcodes, the usefulness of RFID chips is limited. Blame this on the unavailability of suitable IT infrastructure and the non-uniformity of industry standards. In contrast, the decades-old bar code has evolved from what initially allowed prices to be automatically scanned into the cash register, to that which provides insights for inventory and supply chain management. This also applies to fully electric cars versus gasoline cars.

The improvements of the old technology have effectively delayed the dominance of the new.

Unlike fully electric cars, a hybrid does not need a supporting network of charging stations. It switches between fuel and electricity. However, it has yet to dominate the market, as gasoline engines have become more fuel efficient and more integrated with other elements of the vehicle. The same can be said of flash memory versus hard disk drives.

The challenges for the new technology may be few, but improvements of the existing will prevent the new from dominating the market. Although the take-over is an eventuality, there will be a long period of co-existence.

When mp3 files were introduced, CDs still maintained a high market share but there was hardly any growth. Although they came out with SACD, this format only appealed to an unsubstantial niche. Meanwhile, the mp3 format patiently waits for the “tipping point.” Same for High Definition (HD) TV, versus the standard definition TV.

The old technology may be putting up a strong front, but it knows that its time is up. The new technology is just waiting for the ecosystem to be developed, then takeover shall begin. Nokia did nothing wrong, yet they lost. Kodak held on to its superior film technology, at that time a very logical and sensible decision. Sony Walkman was the standard of portable and quality music.

In adopting technology, every enterprise faces two fears. One, adopting too late and missing the wave. Two, adopting too soon and exhausting all resources before the wave begins. The timing is a mystery. This is the problem. We are “relatively good at determining whether a new technology poses a threat,” but we are extremely lousy at predicting when this will happen.

There is no way of knowing. The dynamics are too complex, the variables too numerous. One can only bet . . . and pray.

Real Carpio So lectures on strategy and human resource management at the Management and Organization Department of the Ramon V. del Rosario College of Business of De La Salle University. He is also an entrepreneur and a management consultant. He welcomes comments at realwalksonwater@gmail.com. Archives can be accessed at realwalksonwater.wordpress.com. The views expressed above are the author’s and do not necessarily reflect the official position of DLSU, its faculty, and its administrators.

REAL CARPIO SO

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