Point of Inflection

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A point of inflection is a mathematic term that describes the point on a curve where the gradient is naught (zero). Its the point at which everything changes, what sociologists and marketers call the tipping poing. Technological progress (and market adoption technology) often moves foward through paradigm shifts which can be shown as a series of bumps on an ever increasing shallow curve. For example, computer use in homes has sky rocketed in just a few years due to the internet. Just as technology moves forward through these processes so do the companies that sell it. Once there was a company full of over ambitious nerds who wrote developers tools for computers, the bought and modified some software that did really well when IBM licenced it and developed a new breed computer. But things really picked up when they developed useful applications for computer users to help the write and do math. Their business exploded to become one of the worlds biggest when they borrowed a new visual way of relating to your computer without complex commands. That company is Microsoft and the products described were BASIC, DOS, Word, Excel, Windows.

Sony has a history of market innovation and engineering. The company was so successful that some of its product names started to be used to describe generic products, however occasionally it was wrong footed and ended on the losing side in the marketplace. Sony had a video standard called Betamax which was technically second to none and became adopted in a modified form (Betacam) within the broadcast sector, its consumer cousin however withered away to nothing in the marketplace. Sony was determined not to allow this disaster to happen again and was successful in developing new formats that customers loved. The secret sauce was to have a critical mass of content. In doing so the company went from being a respected electronics company to a content bohemoth that also made electrical goods. All this growth and success in the market was not without pain. Whilst the electronics side of the business continued to develop cool products the plants that manufactured them did not move forward. The company became inefficient compared to upstarts from other Asian countries.

A new shift in peoples homes came along on in consumer homes and the company failed to develop a coherent strategy to meet the challenges and opportunities of the internet, including digital downloads. However Sony was not the only one to be wrong footed by the ‘net. In Sony’s case the problem was that of the innovators dilemma were previous success and infrastructure is a handicap when competing against disruptive technology. Where it could have made a critical error according to some reports in the news (for example here) is not accepting an offer made by Steve Jobs CEO of Apple last April.

By deciding to go their own way rather than joining up with the worlds leader in digital downloads and players Sony may have made the Betamax mistake all over again. April was the point of inflection or (tipping point in marketing terms) and Sony missed the boat. History has been made….