The Innovator’s Dilemma Hits Medical Imaging Solutions
The idea behind Clayton Christensen’s Innovator’s Dilemma is that given huge investments in the status quo, market leaders often lose their positions to upstarts that attack the market with seemingly inferior technologies and low prices and then work their way up the food chain – think Xerox versus Canon in printers and copiers or the US auto industry versus Honda and Toyota. Given how long this powerful idea has been around and the numbers of companies that have been victimized by it, you would think business leaders would know better, but here we go again – maybe
In this case a firm called Mobisante is introducing a field-portable medical ultrasound device/app that runs on smartphones. The scanner will cost $7,495 in a market where even entry-level equipment can cost tens of thousands. While the hardware is currently a dedicated smartphone that you must but from Mobisante, we know how this usually plays out – over time the technical limitations get worked out and an interesting technology becomes a disruptive technology that wreaks havoc with the pricing of incumbent suppliers.
The battle is usually bloody but the outcome inevitable with the attacker displacing incumbents who can’t discount their legacy products far enough to remain competitive. In this case, the outcome may not be as inevitable as one of the incumbents in GE Healthcare. A few years ago, GE introduced a low-priced ultrasound machine for emerging markets. That device, the Vscan, is now available in the US for roughly $7,900. While Mobisante is a mouse to GE’s elephant, the competition will be interesting. GE may have the technological advantage and a strong price for now. But, if equipment makers can successfully use smartphones as low-cost universal platforms, all bets are off and we will see more giants fall to the curse of incumbent technologies, cost structures, and uncompetitive pricing.
