A new, simpler technology comes out that is cheaper but not as powerful as what big companies already sell. At first, only a few small customers buy it. How might this new technology still threaten the big companies in the future?

This scenario describes a classic case of disruptive innovation, a process by which a simpler, more affordable technology can eventually displace established market leaders, referred to as incumbent companies, even if it is initially less powerful. The new technology poses a threat by targeting underserved or unserved segments before moving into the mainstream market. Initially, the new technology appeals to specific customer segments: either "low-end" customers or "new-market" customers. Low-end customers are those who are overserved by the existing, more powerful, and expensive products offered by big companies; they are willing to accept less performance for a significantly lower price and simpler functionality. New-market customers are individuals or small businesses who previously could not afford or access the complex, high-cost offerings of incumbent companies, making the new technology accessible to them for the first time. Incumbent companies typically focus on continually improving their existing, high-perform....