Technology S-Curve

資管三 陳彥如
資管三 劉有智
電機三 黃文泰
物理三 張本育
物理三 廖建安

Outlines

 Abstract
 The usefulness of technology S-curve at the industry level
 The limitation of S-curve at the individual firms level
 Summary
 More discussions

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 What is “S-Curve”?
 The uses of S-curve at the industry level :
Š The description of the magnitude of improvement
Š The prescriptive S-Curve theory
 Product performance results from:
Š Component technology
Š Architectural design
S-curve can provide convincing explanations of why alternative technologies
have made substantial inroads against currently dominant technology?

The Position on S-curve Corresponding to BCG

HIGH Market Share

LOW

Product
performance
Growth

Time or engineering effort

LOW

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 The Limitation of S-Curve

 From the point of view of a manger within a single firm,

could the S-curve be the prescriptive tool for new component
technology development? (at the individual firm level)
Š The observed maturation of a technology maybe the result, rather than
the cause, of the launch of an alternative development program.
ƒ Nobody knows what the natural, physical performance limit is in complex
engineered products.
Š The flattening of S-curve is a firm-specific, rather than uniform
industry, phenomenon.
Š Extending the conventional technology S-curve, rather than switching
S-curves?
ƒ By improving the architectural system
ƒ By applying effort to less mature element of the system

Magnetic Rigid Disk Drives

 Hard Disk industry :

Š During 1970~1989, the improvement was steady, averaging 34% per
year
Š With time as the horizontal metric, no S curve pattern of progress is
yet apparent.
Š Measure total industry revenue as a proxy for engineering effort

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 Using S-Curve to Prescribe Development of
New Component Technologies

 The risk to switching to a new S-curve.

Š Cost more and take much longer time
 When to manage the switch from one component
technology to another?
Š Engineers sensed they were approaching the physical limit of ferrite
cores before 1970.
Š With a process used in integrated circuit manufacturing, thin-film
photolithography, they can create much smaller, more precise
electromagnets on the head.

Two S-curves for Ferrite-oxide Technologies at

Fujitsu and CDC

 The areal density was pushed

to about triple the level at
which seems initially to have
planned to abandon
technology.
 Is 30 mbpsi Fujitsu reached in
1987 the “real” natural limit of
ferrite heads and oxide disk?

The observed maturation of a technology maybe the result,

rather than the cause, of the launch of an alternative
development program.
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 Points at which Thin-Film Technology was Adopted by Leading
Manufacturers, Relative to the Capabilities of Ferrite-Oxide
Technology at the Time of the Switch

Points at which Thin-Film Technology was Adopted by Leading

Manufacturers, Relative to the Capabilities of Ferrite-Oxide
Technology at the Time of the Switch

 Only 5 of the 15 firms shown actually leapt above the

convention technology.
 Conventional technology progressed far further than anyone
expected.
 Different competitors switched S-curves at different points.
 Little evidence show that companies switched S-curve early
enjoyed attacker’s advantages.

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 Relationship between Order of Adoption Thin-Film Technology and
Areal Density of Highest Performance 1989 Model

There is no correlation between order of adoption and rank

order of density ÎEntrants enjoy no attackers advantage.

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IBM & HP

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 Relationship between Order of Adoption Thin-Film Technology and
Areal Density of Highest Performance 1989 Model

 Entrants enjoy no attackers advantage.

 No systematic differences exist in how firms respond to

potential maturity in component technology. (EXHIBT 8)
Š IBM, switching to advanced component technology
Š HP, relying upon
ƒ Incremental improvement in established component technologies
ƒ Refinements in system design

Switching to new S-curve is not the only option.

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S-curve of Architectural Innovation

 Different from S-curve of component innovation

Š Architectural technologies indeed follow S-curve patterns!
 Timely S-curve switching seems critical when confronting
architectural technology change.
 Not only technological dimensions but also market
innovation.

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 Comparing Prescriptive S-curve and S-curve
of Architectural innovation

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Comparing Prescriptive S-curve and S-curve

of Architectural innovation (con’t)

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 Conclusions

 The application of S-curve at a managerial level seems to be

very ambiguous.
 There is more than one way to skin the cat.
 There was no clear evidence of any first mover benefits or
“attackers’ advantage.”
 Comparing with architectural technologies.

1. Switching to new component technology S-curve

early results in no competitive advantage
2. Switching to architectural S-curve enjoys
powerful first-mover advantage

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