As calculators became electronic in the 1960s and 1970s the industry experienced an explosive growth.

Here are some statistics on the growth, along with somepredictions made in 1970 (in thousands).

Virtually all manufacturers of mechanicalcalculators had collapsed by 1972.p y

But what about all the entrant firms that sought to exploit this stunning growth?

Especiallyp yin Japan,

fimany firmssought to soug t toenter this

i d t dindustry and exploit theexploit the growingmarket.

It was the introduction of integrated circuits that created a rapid decrease in prices and increase

in performance.

This shift and later the introduction of a calculatoron a chip in 1971 had a huge impact on the

industry structure.

In the mechanical era, the industry was vertically integrated. Firms had their own sales organizations…

… And manufactured their own mechanical components.

In the electronic era, the components were made by semiconductor firms such as Rockwell and Fairchild.

And calculators were no longer sold in special stores by firms maintaining strong relationships to business customersfirms maintaining strong relationships to business customers.

Instead, they were sold in bookstores, or by discountretailers, who could cope with the ever-growing volumes.

As a consequence the barriers to entry were very low SoAs a consequence, the barriers to entry were very low. So while the market grew and consumers got better and better

products each year, firm after firm collapsed.

The early 1970s are therefore often referred to as ’The Great Calculator War’ where entrants flooded the market withCalculator War’, where entrants flooded the market with calculators and most of them went out of business, with Sharp and a few other companies as notable exceptions.

Firms tend to enter growingindustries in a Klondike

manner, but the outcome is often modest, simply

because others are doingbecause others are doingprecisely the same thing.

Christian Sandström wrote his PhD on technological discontinuities and the challenges they present

for firms.for firms. He writes and speaks

about disruptive innovation andinnovation and

technological change.

www.christiansandstrom.org

More about Christian and his research:

www.christiansandstrom.org