Idiosyncratic Motivation to Radical Product Innovation: Early and Late Stage of the Smartphone Industry

Abstract

We investigate how performance above or below aspirations motivates firms to generate radical product innovation in the new industry. In particular, we distinguish new industries into early and later stages based on the industry S-curve model. We argue that the motivation to generate radical product innovation will be strongest when the firm’s performance is below aspirations in the early stages. However, we argue that firms performing above their aspirations will generate radical product innovation in the later stages. These effects are stronger for early-entry firms than for late-entry firms. We validate our hypothesis using data on smartphone products and components introduced globally between 2007 and 2018. We find the idiosyncratic motivation for radical product innovations according to the industry environment.