ABSTRACT
In conjunction with the automobile industry, the digital device industry is projected to provide Asian countries a major competitive edge as one of their core industries. Despite its impressive growth, however, the deflationary effects of commoditization are becoming evident in the digital device industry, casting doubt on many a corporations’ ability to maintain profitability. Using point of sale (POS) data, this research assesses the effectiveness of corporate innovation measures in this type of competitive environment. Over time, the digital device product segment is expected to show falling prices; however, companies can still preserve and improve price levels by implementing thorough incremental and radical innovations. As regards companies, incremental innovations serve to maintain price for acquiring value, while radical innovations contribute to value creation. For product segments with modules and system integration tools already available on the market, the scope for such innovation is rather limited, along with the likelihood of a price deflation high. In the digital marketplace, creating competitiveness requires building independent product platforms and product architecture, in conjunction with incorporating a “black box approach”1
that safeguards a product’s core module technologies.
