Can Firms Simultaneously Pursue Technology Innovation and Design Innovation?

Abstract

There are two types of innovation: technology innovation and design innovation. Each type has a positive effect on corporate performance. However, results of our analysis on the appearance, user friendliness, and technological functionality of cellular phones between 2005 and 2010 show that in the years 2005–2007, when TV functionality was introduced in cellular phones, cellular phone manufacturers sacrificed appearance instead of improving functionality. However, this issue was resolved in 2008–2010, and companies succeeded in simultaneously attaining appearance and user friendliness. In other words, it has become clear that companies in the Japanese market first tend to prioritize functionality through technology innovation than appearance (i.e., industrial design), and then later tend to simultaneously pursue both appearance and user friendliness through design innovation.