Modularization as disruptive innovation

Abstract

The trend toward modularization, which has been evident in electronic products since the 1990s, is usually seen as a form of architectural innovation. However, the relationship between technology and the customer/market has been characterized by disruptive innovation wherein 1) the level of technology and the value of the product have been downgraded, and consequently, 2) conventional legitimacy has become invalid. Accordingly, although the current leading Japanese companies have not been negligent in their innovation, they have lost their share of the market to new products born from modularization, which had initially been thought of like toys.