Published at : 25 Jan 2024
Volume : IJtech
Vol 15, No 1 (2024)
DOI : https://doi.org/10.14716/ijtech.v15i1.6068
Koji Masuda | Graduate School of Science and Technology for Innovation, Yamaguchi University, 2-16-1 Tokiwadai, Ube, Yamaguchi, 755-8611, Japan |
Shigeyuki Haruyama | Graduate School of Innovation and Technology Management, Yamaguchi University, 2-16-1 Tokiwadai, Ube, Yamaguchi, 755-8611, Japan |
The timing of
market entry is important for companies to achieve commercial success. The
relationship between good market entry timing and the emergence of a dominant
design was discussed. However, the dominant design was assumed to be known only
in retrospect. In this study, targeting the projector industry, we demonstrate
that the timing of the emergence of the dominant design can be forecast in
advance by deriving the time relationship between product launch and patent
application. The emergence of dominant designs and the timing of their
emergence were identified based on the analysis of product trends in the
market. The timing of the patent application that the dominant design will
emerge was forecast based on the analysis of technology trends using patent
information. The cycle type of the projector industry was considered, and the
time lag between patent application and product launch was inferred. This study
provides a useful insight into the dominant design.
Dominant design; Patent analysis; Process innovation; Product innovation; Projector
Companies are expected to create innovations to survive and maintain competitiveness in the market (Berawi, 2021). They comprehend their customers' needs, develop new products that fulfill the desired value, and subsequently introduce these products to the market. When customers find satisfaction in the value of the product, the company, in turn, captures value (Kotler and Armstrong, 2011). In this way, commercial success is achieved.
The market entry of innovative products significantly
changes the competitive environment (Gerken, Moehrle, and Walter, 2015) and requires firms to
improve their business, product, and process development (Taleb and Pheniqi, 2023). The timing of a new
market entry is a strategic decision for firms, and its timeliness is crucial
to forming a competitive advantage (Tatiana and Mikhail, 2020; Suarez, Grodal, and Gotsopoulos, 2015).
Several researchers have studied the order of entry for first movers and latecomers, and a variety of findings are known: whether early or late entry is more advantageous depends on firm-specific characteristics (Lieberman and Montgomery, 1988); newcomers are more likely to gain market share with early entry, while incumbents are more likely to perform better if they wait while newcomers test the markets (Mitchell, 1991); early entry during the growth phase of the industry life cycle is helpful for survival, but is detrimental during the maturity phase (Agarwal, Sarkar, and Echambadi, 2002). However, these studies are based on relative time order - earlier or later.
In contrast, with respect to the specific time, several previous studies
disclose the timing of entry. Entry was particularly advantageous during a
window just before the emergence of a dominant design (Christensen, Suarez, and Utterback, 1998). The firms that
ended up capturing the new market appeared just when the dominant design was
about to emerge (Markides
and Geroski, 2004). In the concept of a dominant category, firms that enter during the time
window between the emergence of the dominant category and the emergence of a
dominant design tend to perform better than firms that enter during other
phases (Suarez,
Grodal, and
Gotsopoulos, 2015). A good time for market entry is when. At
least, it’s common knowledge that it precedes the emergence of a dominant
design (Baum et
al., 1995; Suarez and Utterback, 1995).
Suppose the
timing of market entry can be identified early and with high probability. In
that case, companies will be closer to commercial success by developing and
implementing strategies to coincide with the timing of market entry.
The emergence of a dominant design and the timing of
its emergence
What is a dominant
design? Utterback
(1994) defined that a dominant design was the one that won the allegiance of the
marketplace. Anderson
and Tushman (1990) defined a dominant design as a single configuration or a narrow range of
configurations that accounted for over 50 percent of new product sales or new
process installations and maintained a 50 percent market share for at least
four years. Moreover, Koski and Kretschmer (2007) stated that horizontal and vertical innovations that
were imitated widely by competitions form a dominant design. Thus, the
emergence of a dominant design is a situation in which a certain design is
widely recognized in the market at a certain time, and the timing itself is
nothing other than the timing of its emergence.
The emergence of a
dominant design is analyzed from the perspective of markets and products. Utterback (1994) discussed the
emergence of dominant designs from the entries and exits of firms in the market
for eight cases, including the manual typewriter and automobile industries. Srinivasan, Lilien, and Rangaswamy (2006)
constructed case histories for each product category’s evolution for 63
office products and consumer durables and then identified if and when a
dominant design emerged. Koski and Kretschmer (2007) discussed the dominant design in mobile telephony
based on the development of design and features from product information.
Similarly, Cecere,
Corrocher, and
Battaglia (2015) analyzed the
emergence of the dominant design in smartphones by focusing on the evolution of
product characteristics. Huenteler et al. (2016) showed the emergence of dominant designs for solar PV
by market share of different designs and for wind power by the share of firms
with different designs active in the market. The number of firms, product
development and evolution, and share of designs, which previous researchers
used as factors in their analysis, are observed as a result after firms and
products have appeared on the market. Dominant designs can only be known in
retrospect (Anderson
and Tushman, 1990), and it is doubtful that they can be recognized except in retrospect (Utterback, 1994).
On the other hand,
from the perspective of technology and invention, there are prior studies
concerning the emergence of a dominant design that focuses on patent
information. Clymer
and Asada (2008) demonstrated the emergence of dominant designs for each firm based on the
number of patents in nine categories for inkjet printers. Brem, Nylund, and Schuster (2016) evaluated whether a
dominant design existed in a certain patent class during a certain year,
focusing on the percentage of patents that cited the same patent in a patent
class. Ishii, Kaminishi, and Haruyama (2021), Ishii et al. (2019) illustrated the
emergence of dominant designs by investigating the innovation of products and
processes using the number of patents from Japanese patent classification for
inkjet printers and projectors.
It is generally
accepted that patents represent a significant indicator of research and
development activities and innovation for companies (Rocheska et al., 2017; Griliches,
1998). Inventions are filed as patents, generally published after 18 months, and
some are granted. An innovative product is developed using the invention,
offered to the market, and positioned as a dominant design through wide market
recognition. Therefore, if it takes several years to several decades from the
time when analyzable published patent information is available to when the
dominant design emerges, we believe that we can forecast the emergence of the
dominant design and the timing of its emergence with high probability during
this period.
In the previous study, the analysis of patent information indicated the emergence of a dominant design, but it has not been specifically verified whether a dominant design had really emerged in the market. Ishii, Kaminishi, and Haruyama (2021) identified the emergence of a dominant design in a product launched three years after the timing of the emergence forecast by the patent analysis, one of which was the world's first laser light source projector. However, whether the product is appropriate as the emergence of dominant design in light of the definition by the previous researchers has not been fully discussed.
The purpose of this study is to answer the question of whether the timing of the emergence of a dominant design cannot be forecast. If so, companies can gain a competitive advantage and increase their chances of commercial success by entering the market before the timing of its emergence. The analysis proceeds as follows. From the market and product perspectives, we identify whether a dominant design emerged and when it emerged. Next, from the technology and invention perspectives, we apply patent analysis to forecast the emergence of the dominant design and the timing of its emergence. We then use the actual identified results and the forecast results to clarify the issues and consider their validity.
The analysis was
conducted in three steps: selecting a product category, identifying the actual
emergence of a dominant design based on the analysis of product trends, and
forecasting the emergence of a dominant design based on the analysis of
technology trends. Figure 1 shows the three-step process in this study. In the
first step, a product category that has reached the mature stage of its product
life cycle was selected as the analysis target. This is because it can be
assumed that a dominant design has already emerged. In the next step, a large
number of products introduced to the market by each company were investigated,
and their product trends were analyzed. Based on the trend analysis, the
emergence of a dominant design was identified, i.e., the product attributes
that were widely recognized in the market and the timing of its emergence. In
the last step, some patent information on the product was extracted, and their
technology trends were analyzed. Based on the trend analysis, the timing of the
emergence of a dominant design was forecast.
3.1.
Selecting a product category
Focusing on the
projector industry, we considered the specific segment to be analyzed. When
trying to identify product attributes that were widely recognized in the
market, product type and brightness were thought to have a particularly large
impact on product design in projectors. These two product perspectives, along
with market share information, were used to select the segment.
Figure 1 Three-step process for forecasting the timing
of the emergence of a dominant design
3.2.
Identifying a
dominant design based on the perspective of markets and products
Koski and Kretschmer (2007) discussed the emergence of a dominant design
from the perspective of vertical and horizontal innovation, focusing on the
design and features of cellular handsets. In the product category of projectors
selected above, we considered that product selection at the time of purchase
was influenced by the average acceptability of all users, whereas
consumer-oriented products such as cell phones emphasize the preferences of
individual users. In this analysis, we focused on the design and features
related to the core benefits that the product category provides to its users,
with particular attention to the perspective of vertical innovation.
In this section, the following procedure was
used for the analysis. First, we selected product attributes that represent
fundamental and essential design features from the user's viewpoint. Second,
the coefficient of variation and coverage were evaluated as indicators
according to the characteristics of the attributes, and the evolution of their
attributes was analyzed. Third, the actual emergence of a dominant design as a
product category was identified based on when each attribute was a dominant
design.
The
attributes were divided into quantitative and binary attributes. The
quantitative attributes were evaluated based on whether the coefficient of
variation (CV) was homogeneous, and binary attributes (presence or absence of
attributes) were evaluated based on whether the coverage was sufficiently high.
As a criterion to determine whether the attribute reached a dominant design,
i.e. whether the attribute was widely recognized in the market, a threshold of
0.8 was set for the coverage, considering that an attribute that was installed
in 80% of the products was sufficiently recognized in the market. Given a
binomial distribution with "installed" as 1 and "not
installed" as 0, the coefficient of variation is 0.5 when 80% of the
products were equipped with the attribute. The threshold of the coefficient of
variation was set to 0.5, which was equivalent to the threshold of the
coverage.
3.3. Forecasting a dominant design based on the perspective
of technology and patents
To
derive the timing of the emergence of a dominant
design quantitatively based on patent information, we returned to the figure of
"The Dynamics of Innovation" by Utterback (1994)
and redefined the timing of its emergence. Utterback (1994) stated
that the emergence of dominant design shifts the competitive emphasis from
product innovation to process innovation and that the market acceptance of
product innovation and the emergence of dominant design are hallmarks of a
transition phase. In light of this context and the figure, we considered the
boundary between the fluid phase and the transitional phase, where the curves
of product innovation and process innovation crossed, to be the timing of the
emergence of a dominant design.
Methods for
separating patent applications into product innovation and process innovation
were disclosed, such as using the Japanese patent classification (Ishii, Kaminishi, and Haruyama, 2021;
Ishii et al., 2019) and using claim categories (Wittfoth, Berger, and Moehrle, 2022). It was also
mentioned that text mining, a variation of data mining that extracts
information from structured data, was effective for analyzing large amounts of
data, such as patent information (Surjandari, Naffisah, and Prawiradinata, 2015). Masuda and Haruyama (2021) pointed out that a
clear perspective on forecasting technology trends was provided by using the
approach that separates published patents into product and process inventions
by performing text mining on the title of inventions.
To
predict the timing of the emergence of a dominant design, we applied Masuda and Haruyama (2021) approach, wherein patent applications were
categorized into product and process inventions. The intersection point of
these two curves was then derived.
In this section, the following procedure was used for the analysis. First, the patent population for the projector under analysis was collected using the patent database of the Japan Patent Office (JPO). Second, the patent population was then divided into two subpopulations, product inventions and process inventions, using Masuda and Haruyama's approach (Masuda and Haruyama, 2021). Third, the crossing point was derived from these two curves, and the timing of the emergence of a dominant design was forecast.
According to the method
described in Section 3, the timing of the actual emergence of the dominant
design in the product category was identified. The timing of the emergence was
forecast based on the patent analysis of the product.
4.1.
Selecting a product
category
Table 1 shows the
product types and their main applications. The product types were segmented
into three main categories: business and education, home, and mobile. The
installation and usage methods differ by product type, which limits the size
and weight of the product and influences the product design. In addition, the
resolution of the required image display panel (e.g., liquid crystal display
panel) tends to differ depending on the application, and the choice of the
image display panel and its controller influences the product design.
Table
1 Segmentation
of projectors in terms of product types
Product
types |
Main
applications |
Business
and Education |
Corporate
and educational products for presentation use in offices and educational
facilities, mainly for projecting still images |
Home |
Consumer
products for home theater use, mainly for projecting moving images |
Mobile |
Specialized
lightweight products for portable use |
Brightness is one of the fundamental attributes of
projectors and is required to ensure visibility according to the space and
situation in which the projector is used. Table 2 shows the brightness required
for different applications. The brightness was segmented into three categories,
with the central range of brightness set at 2,000 - 4,000 lumens. Projectors
tend to be equipped with high-power light sources depending on the brightness,
which increases the size and weight of the product and has a significant impact
on the product design.
Brightness |
Main
applications |
< 2000
lumens |
Relatively
dark rooms or small spaces (e.g. home or mobile applications) |
2,000 -
4,000 lumens |
Bright and medium-sized spaces, such as general meeting rooms or
classrooms |
> 4,000 lumens |
Larger space, such as large conference rooms or halls |
According to market research, the volume share of
Japanese manufacturers in the global market for the projector industry in the
2010s exceeded 50%. We assumed that the product trends among Japanese
manufacturers roughly reflect global market trends. In the analysis of product
trends described below, we focused on the products launched by Japanese
manufacturers in the Japanese market and analyzed the product information on
their websites. For the analysis of technology trends, we focused mainly on
patent information from the Japan Patent Office (JPO), where patent
applications of Japanese manufacturers are filed.
In the Japanese market in
the early 2010s, the volume of the business and education category accounted
for approximately 80% of all projectors, of which the volume of the 2,000 -
4,000 lumens brightness category accounted for approximately 85%. This product
category was regarded as the main category of the projector industry and was
selected to be analyzed in this study. The volume of this product category
slowly increased, peaked in 2016, and decreased since then. We considered that
the projector industry had reached the maturity stage of its product life cycle
and that a dominant design already emerged.
4.2. Identifying a dominant design by product trends
4.2.1. Selecting some attributes
Brightness was selected as an
attribute for the design aspect. The rationale behind this lies in the limited
product category of brightness (2,000 - 4,000 lumens). When the price remains
constant, there is a tendency to favor brighter products. As a result,
brightness is considered a fundamental attribute in the context of vertical
innovation. In the business and education category, size, weight, and
resolution are not considered important attributes for selecting a product.
Since business and education projectors are always installed in meeting rooms
and classrooms or suspended from ceilings, size, and weight do not have much
influence on product selection. Similarly, resolution has no impact if it is
sufficient for business and education applications. Some users purchase
higher-priced products due to their smaller size, lighter weight, and higher
resolution, but they are limited.
Next, we consider the features aspect. The main role of projectors is to
project image information input from a PC or other device onto a screen. A
D-subminiature (D-sub) connector that supports analog signals is necessary
basic equipment for inputting image information to the projector. A
high-definition multimedia interface (HDMI) connector supports digital signals.
Especially for business and education applications, it is essential to have a
universal serial bus (USB) type-A connector that allows image information to be
input from a USB memory device without a PC, and a wired and/or wireless local
area network (LAN) connection that allows remote input of image information and
remote control of the projector. For projection onto a screen, manual and/or automatic
keystone correction (KC) to correct for image distortion is a fundamental
feature, especially vertical KC, since the projector is usually installed
squarely facing the screen, not at an angle. Horizontal KC is only required for
special installations.
The following fundamental and essential attributes were selected as
required for business and education projectors: brightness, various connectors
(D-Sub, HDMI, USB type-A), LAN connection, and vertical KC. For each of these
attributes, we quantitatively analyzed the evolution of the coefficient of
variation and the coverage to evaluate the emergence of a dominant design.
4.2.2. Actual emergence of a
dominant design
We examined the
products launched in the Japanese market between 2000 and 2017 by the top three
Japanese manufacturers of volume share in the early 2010s, EPSON, NEC, and
HITACHI, to analyze product trends. The volume share of these three companies
in the global market was approximately 40%. The number of 2,000 - 4,000 lumens
business and education projectors listed from each manufacturer's website was
344 in total (EPSON: 143 products (EPSON, 2022), NEC: 121 products (NEC, 2022), HITACHI: 79 products (HITACHI, 2022). Figure 2 shows the product trends of each company. The first products
were first launched in 2000, and the number of products peaked in 2011.
Figure 2 Product trends of each
company
For each attribute,
the analysis was conducted after 2003, when the number of products reached
double digits. Figure 3 shows the mean value and the coefficient of variation
(CV) for the brightness of products launched each year. A three-year simple
moving average was used for smoothing. The reason for using a three-year period
was to remove one-year-level irregularities while minimizing the effects of
five-year-level long-term fluctuations to obtain the timing of the emergence of
a dominant design on an annual basis. The mean value was approximately 2,500
lumens in 2003, increasing monotonically to approximately 3,500 lumens in 2016.
The calculated coefficient of variation decreased monotonically, without peaks,
and their heterogeneity was not observed. Here, CV is calculated by dividing
the standard deviation of the brightness of the projectors divided by their
mean brightness each year. The CV remained homogeneous since 2003, with a value
less than half of the threshold of 0.5. Brightness, a fundamental attribute of
the design aspect, became the dominant design at an early stage.
Figure 3 Mean value and the
coefficient of variation (CV) for brightness
Figure 4(a) shows the
three-year simple moving averages of the coverage of the D-Sub connector, HDMI
connector, and USB type-A connector, which are the image information input
equipment. The coverage of each feature is calculated as the number of products
equipped with the feature divided by the total number of products. The D-sub
connector remained at the coverage of 1.0 since 2003 and was an analog input
connector equipped as a fundamental feature of this product category from the
early stage. The HDMI connector, a digital input connector that enables
simultaneous transmission of digital images and audio, spreads to flat-panel
TVs and optical disc devices, then to projectors. The coverage of HDMI
connectors rapidly increased, exceeding 0.8 in 2011 and reaching 1.0 in 2013,
as they eliminated the need for audio cables. The USB type-A connector coverage
gradually increased, exceeding 0.8 in 2013.
Figure 4 The coverage: (a) D-sub,
HDMI and USB Type-A connectors; (b) LAN connection and Vertical/Horizontal KCs
Figure 4(b) shows the
three-year simple moving averages of the coverage of LAN connection and
vertical/horizontal keystone corrections. The LAN connection coverage increased
gradually and reached 0.8 in 2012. The coverage of vertical keystone correction
remained at 1.0 since 2003, indicating that it became a fundamental feature
early on. In contrast, the coverage of horizontal keystone correction exceeded
0.8 in 2015. We assume that the equipment of this feature was delayed because
the feature is not used in the normal installation of the projector (i.e.
installed squarely against the screen) and is required only for limited users.
The attributes for
the features aspect are summarized below. The D-sub connector
and vertical KC achieved full coverage with a rating of 1.0 in 2003,
establishing each as the dominant design. The HDMI connector, USB type-A
connector, and LAN connection became the dominant design in 2011, 2013, and
2012, respectively, when they reached the threshold of coverage.
The attributes of
design and features consist of the fundamental attributes that were available
early on: brightness, D-sub connector, and vertical keystone correction, and
the essential attributes that became dominant design at approximately the same
time from 2011 to 2013: HDMI connector, USB type-A connector, and LAN
connection. Since each attribute was the dominant design in 2013, the dominant
design as the product category was formed at this time.
4.3.
Forecasting the timing of the
emergence of a dominant design through patent analysis
Patents published by the JPO were used in this
patent analysis. The database of published patents on projectors was generated
using two search queries: the theme code of 2K203, which is an original
Japanese patent classification, and the publication date from 1/1/1981 to
12/31/2020. The database contains approximately 30,000 patents with a search
date of 3/2022.
In discussing a dominant design, we focused on
granted patents in that companies ensure the protection and utilization of
inventions to contribute to the development of industry (JPO, 1959) and bring their
products to the market.
Approximately 11,000 patents
granted by the search date were extracted from the database. The period from
the filing date to the registration date was calculated for each patent. Figure
5 shows the mean (M) and standard deviation (SD) of the period. The period
decreased monotonically, and M+3*SD was approximately 7.2 years as of
2014-2015. As of 2022, the search date, most of the patents filed by 2015 will
have been granted. Therefore, when conducting a patent analysis using
granted patents, the effective filing date is up to m2015. Furthermore, based
on the market information shown in Section 4.1, the dominant design is
considered to have emerged before 2016, so information on patent applications
up to 2015 is sufficient.
Figure 5 The period from the filling
date to the registration date
In the subsequent analysis, granted patents for
which patent applications were filed by 2015 were extracted from the database
and used as the population. The population consisted of approximately 9,900
patients. The population was separated according to whether the title of the
invention contained a noun phrase consisting of a process innovation-related
keyword and the word method, generating two sub-populations. The former was
process inventions, and the latter was product inventions (Masuda and Haruyama, 2021).
Since innovation output can be related to the number of patents (Watanabe, Tsuji, and Griffy-Brown, 2001; Crepon, Duguet, and Mairessec,
1998), we replaced process
innovation with process inventions and product innovation with product
inventions to measure the extent of innovation.
Figure 6 shows the
trends of product innovation and process innovation, normalized to 1 for the
total number of patents granted by 2015 for product inventions and process
inventions, respectively. This figure corresponds to that of “The Dynamics of
Innovation” by Utterback
(1994). Here, a three-year simple moving average was used for smoothing. Product
innovation peaked around 2005, and as product innovation decreased, process
innovation increased, peaking in 2012 and decreasing thereafter. This indicated
a shift from product innovation to process innovation. The crossing point of
the two curves was in 2007-2008. This timing of patent application forecasts
the timing of the emergence of the dominant design.
Figure 6 The trends in product and
process innovations by granted patents
Discussion
In Section 4.2, we
showed the actual emergence of the dominant design in the market and the timing
of its emergence based on the product trend. In Section 4.3, we showed the
timing of patent application, forecasting the emergence of the dominant design
based on the technological trend from the patent analysis. In relation to these
two results, what is the time lag
between filing a patent application and introducing a product to the market?
Combining the results of previous studies and this study, we discussed the
cycle type of the projector industry and estimated its time lag.
Then, although there is
no doubt that the emergence of a dominant design is the result of a market
response, we examined whether it was possible to forecast the emergence of the
dominant design in advance, i.e., whether the forecast of the timing of its emergence
by patent analysis was valid compared to the fact of the timing of its
emergence in the market.
In Section 3.3, we
showed how to find the trends of product innovation and process innovation,
which are a type of technology trend, using Japanese patents, and accordingly,
we depicted these trends in Figure 6 in Section 4.3. We examined whether the
method used in this study is also applicable to non-Japanese patents.
5.1.
Time lag between patent application and product launch on the market
There was a positive
relationship between patents and new product announcements (Artz et al., 2010), and patents were a
useful information source for anticipating perspective products (Gerken, Moehrle, and Walter, 2015). Specifically, there
are previous studies on the time lag between patent applications and product
launches. As an example for one industry, Gerken, Moehrle, and Walter (2015) observed that the
time lag between patent filing and market launch was approximately 30 months on
average and up to 56 months for 13 different automotive parts and components. Ernst (1997) also showed a time
lag of 2 to 3 years from patent application to sales increases for 50 machine
tool manufacturers. As an example for many industries, Napolitano and Sirilli (1990) surveyed 157
inventions for various product groups and found that the time lag between
patent application and productive use was 32% within one year, 64% within two
years, the 96th percentile within five years, and the longest within
six years. Suzuki
(2011) also surveyed 2,398 randomly selected Japanese patents and reported that
the time lag between patent application and product or manufacturing use was 19
months on average, 60 months at the 95th percentile, and 24 years at
the longest.
It was noted that the
companies’ environment influenced the time lag between patent disclosure and
market launch, and one of the factors was the cycle type of an industry (Gerken, Moehrle, and Walter, 2015). In the studies by Gerken, Moehrle, and Walter (2015) and Ernst (1997), automotives and
machine tools are durable goods. Although their survey samples were not very
large, the two results were relatively close, with an average time lag of
approximately 2.5 years and 56 months at the longest. The studies by Suzuki (2011) and Napolitano and Sirilli (1990) were cross-industry
analyses, and their survey samples were large and included a mixture of durable
and non-durable goods. According to these two results, the time lag was
approximately 20 months on average, 5 years at the 95th percentile,
and 6 - 24 years at the longest. The comparison of average time lags supports
the point that durable goods have a longer application lag than non-durable
goods (Pakes
and Schankerman, 1984). Projectors are one of the durable goods, and the
time lag can be inferred to be approximately 5-6 years up to the 95th percentile,
based on the above previous studies.
Furthermore, we
considered the cycle type of the durable goods industry. Srinivasan, Lilien, and Rangaswamy (2006)
surveyed 63 office products and consumer durables. They indicated the time
between product introduction and the emergence of a dominant design was 6.50
years on the mean and 4.94 years on the standard deviation for the 30 products
in which the dominant design emerged. From these mean and standard deviation
values, the 90th percentile was calculated to be approximately 13
years. Further scrutiny of
their findings involved examining three office input/output products similar to
projectors: dot matrix printers, fax machines, and photocopiers, revealing an
average time span of 12 years for these products.
Based on the analysis
of product trends in this study, the time between the product launch and the
emergence of the dominant design was 13 years, since the product launch was in
2000 from Figure 2, and the timing of the emergence of the dominant design was
in 2013. Compared to the study by Srinivasan, Lilien, and Rangaswamy (2006), the time for
projectors was close to the 90th percentile time for the 30 products
and close to the meantime for three office input/output products. Hence, we can
infer that the cycle type of projectors is slower than that of the durable
goods industry. By adding this consideration of the cycle type to the results
of previous studies on the time lag between patent application and product
launch, we can assume that the cycle type of projectors is slower than that of
other durable goods and that the time lag between patent application and
product launch is approximately 5-6 years.
5.2. Is it impossible to forecast the timing of the emergence of the dominant
design?
Product trends analysis indicated that the timing of the emergence of the dominant design was in 2013. The granted patent analysis suggested that the timing of patent applications forecasting the emergence of the dominant design was 2007-2008. Previous studies show that the time lag between patent application and product launch can be approximately 5-6 years. The three results are well related. This means that for the product category of business and education projectors, the timing of the emergence of the dominant design can be forecast based on the patent application information in 2007-2008 without waiting for 2013, when the emergence of the dominant design is recognized in the market. However, as shown in Figure 5, in the case of projectors, the period from the filing date to the registration date of patents is approximately four years on average, so that by the time granted patents become available for analysis, dominant designs will have emerged. Therefore, it is preferable if published patents can be analyzed instead of granted patents.
We attempted to verify this by extracting published patent applications filed by 2018 from the database, considering that it typically takes 1.5 years from application to publication. This subset was used as the population and analyzed in a manner similar to that outlined in Section 4.3. Figure 7 shows the three-year simple moving average trends of product and process innovations, normalized to 1 for the total number of published patents by 2018 for product and process inventions, respectively. Since the dynamics in Figure 7 were very similar to the case of the granted patent in Figure 6, we believe that substitution with published patents is feasible. The crossing point of the two curves was in 2007.
Figure 7 The trends of product and process innovations by
published patents
Figure 8 shows the
ratio of granted patents to patent applications derived from the database. The
ratio increased gradually, and no large fluctuation was observed at the
one-year level; the large fluctuation after 2016 was due to the relationship
between the period from filing to registration and the search date, as
mentioned above. Although the ratio varies from industry to industry, provided
that the ratio does not fluctuate significantly from year to year, it is
possible to substitute published patents for granted patents to conduct such
trend analysis as in this study.
Figure 8 The Ratio of granted patents to patent applications
Arundel and Kabla (1998) found that only four
sectors, including precision instruments, had patent propensity rates for both
product and process innovations combined that exceeded 50%. Since office
input/output products are a type of precise instrument, we believe that this is
one of the factors that contribute to the good relationship between product
trends and patent trends for projectors. In the product category of business and
education projectors, the emergence of dominant design in the Japanese market
was in 2013, and their sales reached their peak in 2016. The results of this
study support the argument that the dominant design would spark increased
demand and that product-class sales would peak after their emergence (Anderson and Tushman, 1990).
5.3. Applicability of this method to
non-Japanese patents for finding the trend of technology
As shown in Section
3.3, this study used the method to divide the invention population into
subpopulations of product inventions and process inventions (Masuda and Haruyama, 2021). In this method, a
set of keywords related to process innovation, such as production,
manufacturing, and quality improvement, are extracted, and process inventions
are separated by whether the title of the invention contains a sequence of
words that combines these keywords with the word "process.” This is based
on Article 2(3) of the Japan Patent Act (JPO, 1959), which basically
classifies inventions into product and process inventions. Therefore, in this
study, the JPO patent database was used, and a text mining algorithm was
applied to Japanese text.
We have examined
whether this method is applicable to non-Japanese patents. Both the Manual of
Patent Examining Procedure in the United States Patent and Trade Office (USPTO, 2023) and the Guidelines
for Examination in the European Patent Office (EPO, 2023) state that there are
only two basic types of claims that constitute inventions: product claims and
process claims. As can be seen from the title of the invention in US patents
and EP patents, it is very likely that process inventions can be separated by the
inclusion of a sequence of words combining the above keywords and the word
“method.” In addition, since words are separated by spaces in English text, it
is easier to perform text mining than in Japanese text, and the accuracy of the
analysis is higher.
In this study, when generating the population
for the analysis of Japanese patents, we utilized the theme code, a unique
patent classification in Japan, as a search query. Since the theme code is
indirectly related to the International Patent Classification (IPC), it is
possible to generate a population that is almost similar to the population
generated by the theme code by combining the IPC. Naturally, expansion to other patent
classifications, such as the Cooperative Patent Classification (CPC), is also possible.
Based on the above,
it is likely that the patent analysis method for non-Japanese patents will be
quite similar to that for Japanese patents. This method may not be limited only
to Japanese patents.
In this study, using projectors as the target of analysis, we identified
the product attributes in which the dominant design emerged and the timing of
its emergence based on the product trend in the market. Then, we conducted the
patent analysis as the technology trend and derived the timing of patent
application to forecast the timing of the emergence of the dominant design by
using published patents. Furthermore, we considered the cycle type of the
projector industry and inferred the time lag between the filing of a patent
application and the introduction of a product. Although the emergence of a dominant design
is known only when a design is widely recognized in the market, we clarified
that there are industries in which the timing of the emergence of the dominant
design can be forecast in advance using patent information, one of the
indicators of innovation. It is important for companies to strategically
identify the timing of market entry to achieve commercial success, and this
study provides one useful insight for identifying such timing. It should be noted that even if the emergence
of dominant designs from patent analysis is forecast, it does not necessarily
mean that dominant design will actually emerge in the market. However, it is
meaningful to show the possibility of forecasting the emergence of dominant
designs and the timing of their emergence in the market based on technology
trends. This allows companies to prepare for dominant designs that will emerge.
In other words, it is a strategic guide. The emergence of a dominant design for all
industries and products is not forecast. Since patent analysis is performed
after patent information is published and generally available, it is impossible
to forecast the emergence of a dominant design for a product whose time lag between
patent application and product launch
is shorter than 18 months. Therefore, it can be effectively applied to
industries where the cycle type is relatively slow.
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