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disruptive technology

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A specific technology that can fundamentally change not only established technologies but also the rules and business models of a given market, and often business and society overall. The Internet is the best known example in recent times; the personal computer and telephone in previous generations.

The term was coined by Clay Christensen, a Harvard Business School professor, in his 1997 book, The Innovator's Dilemma. Disruptive technology often has problems because it is new, appeals to a limited audience, and may not yet have a proven practical application. Often, established users have trouble capitalizing on the new marketing opportunities created by low-margin disruptive technologies. Often industries are changed by an ‘outsider’ using a disruptive technology: for example, the Apple iPod and its iTune service is a good example of how a technology ‘disrupted’ the music industry establishment and traditional business model.

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