How electronics caused massive entry to the calculator industry in the 1970s.

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

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

5. Virtually all manufacturers of mechanical
calculators had collapsed by 1972.
p y

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

7. Especially
p y
in Japan,
many fi
firms
soug t
sought to
enter this
industry d
i d t and
exploit the
growing
market.

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

9. This shift and later the introduction of a calculator
on a chip in 1971 had a huge impact on the
industry structure.

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

11. … And manufactured their own mechanical components.

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

13. And calculators were no longer sold in special stores by
firms maintaining strong relationships to business customers
customers.
Instead, they were sold in bookstores, or by discount
retailers, who could cope with the ever-growing volumes.

14. As a consequence the barriers to entry were very low So
consequence, low.
while the market grew and consumers got better and better
products each year, firm after firm collapsed.

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

16. Firms tend to enter growing
industries in a Klondike
manner, but the outcome is
often modest, simply
because others are doing
precisely the same thing.

17. Christian Sandström wrote
his PhD on technological
discontinuities and the
challenges they present
for firms.
He writes and speaks
about disruptive
innovation and
technological change.
More about Christian and his research:
www.christiansandstrom.org