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Digital Photography and the Dynamics of Technology Innovation by J. Peter Zelten Master of Engineering, Thayer School of Engineering, Dartmouth College 1988 Bachelor of Engineering, Thayer School of Engineering, Dartmouth College 1988 Bachelor of Arts in Engineering Science, Dartmouth College 1986 Submitted to the System Design and Management Program in Partial Fulfillment of the Requirements for the Degree of Master of Science in Engineering and Management at the Massachusetts Institute of Technology February 2002 C 2002 J. Peter Zelten. All rights reserved The author hereby grants to MIT permission to reproduce and to distribute publicly paper and electronic copies of this thesis document in who k T in part. Signature of Author /' J. Peter Zelten System Design and Management Program /S hmniary 2002 Certified by James M. Utterback Thesis Supervisor David J. McGrath jr. Professor of Management and Innovation Accepted by Steven D. Eppinger Co-Director, LFM/SDM General Motors LFM Professor of Management Science and Engineering Systems Accepted by MA idAjSE iS INSTUTE Paul A. Lagace S NOLOGY Co-Director, LFM/SDM Professor of Aeronautics & Astronautics and Engineering Systems Digital Photography and the Dynamics of Technology Innovation by J. Peter Zelten Submitted to the System Design and Management Program January 2002 in Partial Fulfillment of Requirements for the Degree of Masters of Science in Engineering and Management Abstract Companies heavily and successfully invested in traditional technologies (defenders) often find it difficult to make the transitions to new disruptive technologies, in spite of technological competence and clear opportunity to do so. The core competencies that enabled the firm to excel under the old paradigms become core rigidities when faced with the need to address technological discontinuities. Products like digital still cameras, DSCs, represent the convergence of multiple rapidly changing technologies in electronics, optics, computers, networks, and software. The emergence and adoption of digital still photography both accompanies and defines a new paradigm in the sharing of images as it attempts to both emulate and replace the previous modalities while creating new market-expanding opportunities. The emergence of digital still photography has been predicted and promised for several decades. Indeed, it has already managed to replace silver halide altogether in certain market segments previously relied upon by conventional photography firms, and is at present extending beyond the early adopter stage in the broader consumer market. It is a current example of innovation and technological discontinuity, and one that has enough history to permit analysis. It poses a real potential disruptive threat to the incumbent players, some of which have succumbed while others apparently succeeded. This thesis studies the relationships between the development of the composite technologies in digital photography, the environment in which they operate, the emergence of dominant designs, market diffusion, and the strategies for success employed by leading participants. In the process of studying patterns of entry and exit firms and a detailed look at their products, evidence of a dominant design and support in this industry for the Abernathy and Utterback model of industrial innovation is uncovered. Also revealed is a second wave of innovation in the DSC industry that is firmly established and suggests the onset of a Christiansen-style disruptive dynamic. By studying this specific technological discontinuity in the context of the broader patterns, lessons in adapting to technological change in general are learned. Thesis Supervisor: Professor James M. Utterback Title: David J. McGrath jr. Professor of Management and Innovation i ihis JXIUt) 1fl1CTIU)U~I1IIV 1cM bLink ii Acknowledgements Many thanks to my classmates in the SDM Program for the countless discussions and opportunities for learn from you. The faculty and staff of the program have provided an incredible experience and learning environment for us all and are also to be commended. A special thanks to my distance-local comrades, Steve Frey, Marco Serra and Moise Solomon for helping me maintain perspective throughout the program, and to my classmate, Lillian Waago, for helping me get all this started last Spring. I am truly indebted to my thesis advisor, Professor James Utterback, for the many hours of patient guidance and stimulating discussion. The incredible breadth and depth of his knowledge and experience never ceases to amaze me. I would like to thank the Polaroid Corporation, and my sponsor James Shanley for giving me the opportunity to participate in this program and to Paul Ernest for providing the motivation. Equally important has been the support of my colleagues at one time or another on the DMC program; in particular Stan Hom, Andrew Juenger, John Francis, Steve Richardson, Greg Regan, Lily Lam, Peter Shread and Al Green for making it possible to put out a fine set of products with a less-than-full-time systems engineer and project manager. Above all, I am grateful to my wife, Sheryl, for her patient and loving support during this program, and for delivering the most precious creation of this time - our daughter Elizabeth Anne. iii Tahie af Cnntents Digital Photography and the Dynam ics of Technology Innovation .............................................................. I A b s tra c t ............................................................................................................................................ I A ck n o w le d g em en ts ........................................................................................................................ III T ab le o f C o n ten ts ........................................................................................................................... IV L ist o f F ig u re s ................................................................................................................................ v i L ist o f T ab le s .................................................................................................................................. V i In tro d u c tio n .............................................................................................................................................. 1 M otivation - in defense of a perspective......................................................................................... 1 O u tlin e ............................................................................................................................................. 2 Chapter 1: Background and History..................................................................................................... 5 S e n s o rs ............................................................................................................................................. 5 P u b lish in g ........................................................................................................................................ 6 P h o tojo u rn a lism ............................................................................................................................... 7 Studio and Document Photography.............................................................................................. 8 Seeking the Broader M arket....................................................................................................... 9 M ark e t S ize : ............................................................................................................................ 1I 1.... I Renewed Innovations from Defenders ....................................................................................... 11 Chapter 2: Product and Features ............................................................................................................ 14 The Digital Still Cam era.................................................................................................................... 14 Product Architecture...................................................................................................................... 15 T h e S en so r ..................................................................................................................................... 17 CM OS Sensors .............................................................................................................................. 21 Completing the Architecture ....................................................................................................... 22 The Dom inant Design ................................................................................................................... 26 Digital Photography........................................................................................................................... 27 Conventional Photography System ........................................................................................... 27 Digital Photography System .......................................................................................................... 31 Storage - the sleeper function .................................................................................................... 36 W hy choose digital photography? .................................................................................................. 37 Comparison of Im age Quality ...................................................................................................
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