>>>The point is that firms doing marvelously well in one scenario cannot cling to it as the tide comes in. They need to react.
>
>Yes,,they do, but sometimes the best reaction is to just fold up your tent and do something completely different with your cash and energy.
>
>It doesn't follow that the succeeding technology will be as lucrative as the one being supplanted
>A great example is Kodak. Their ROI on film manufacture and processing was huge and they made scads of money at it for decades.
>That has all but disappeared, and Kodak is an also ran player in the digital foto market.
>Does that mean that Kodak blew it?
>They only blew it if investing in digital foto tech was a better investment for the shareholders than were competing investments and that's not clear at all.
>
>Another good example is IBM. Did they blow it by not becoming a leader in PC manufacture as they had been in mainframes?
>Their ROI looks pretty good right now and they got out of the business.
>
>One of the posts here pointed to a link (I wish I had saved the linkt) where a tech exec said:
>"We are on a burning platform"
>
>All of our platforms seem to be subject to burning now, so it's a good time to let things simmer down for a while and not chase things that might fit the classic depiction:
>
>"It's like mackerel by moonlight
>it shineth but it stinketh"
>

IBM actually was a market leader in the early PC days. They were the dominant manufacturer, not to mention their role with PC-DOS and OS/2, through the early 80s. Then an armada of competitors who were willing to sell for a lower price and lower margin appeared and IBM decided to cede the business, as you say. The margins were not what IBM was used to.

My first PC was an IBM XT with 256 kb of memory (paid extra for the upgrade from 128K ;-) ), a 20 MB hard drive, a crap monitor you wouldn't let the dog play with these days, and a NEC SpinWriter daisy wheel printer. Over $7000 in 1984 dollars. I should have hung onto it just so I could donate it to a museum.