Case Number: 5-204-261, Year Published: 2004
HBS Number: KEL023
Technological Inertia, Incumbent Vulnerabilities, Replacement Effect, Economics, Strategy
Motorola invented mobile telephones and by the end of the 1980s came to dominate the mobile handset market with more than 80 percent market share. A few years later, Motorola faced a key strategic choice of whether to focus its considerable resources on consolidating its dominance of the analogue handset market, or to shift these resources to the emerging digital handset technologies. This decision shaped the handset industry and the role Motorola played in it for the next decade. The case provides a vivid illustration of incumbents’ puzzling inertia towards initiating and participating in disruptive technologies.
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