When an innovation in technology changes it in a way that takes it from a specialized, expensive, niche market applicability, to a price and performance point where it can be broadly applied
The Innovators Dilemma: Should you embrace or ignore a new technology to address your existing business?
A new technology comes around which solves an existing ‘problem’ in a way that is not advantageous to the existing major users/customers/revenue providers
Established players are not in a position to capitalize on them because this is not what their existing customers are demanding. In fact it would be negative.
A new player may be able to identify a market in which the new technology’s drawbacks are actually somehow advantages. It goes after that market, all the while perfecting the technology getting it more and more ready for the larger market
When the time is right, the new player if they bet right may be able to go after the larger market, but the established player finds itself behind in the new technology and is blown out of the water.
Example
Performance can be: MPG of a car, or Power of a handheld vacuum cleaner. Other examples?