New technologies and high-spec products are undeniably powerful weapons in business.
Yet in today's market, sustaining competitive advantage through technological superiority alone is becoming increasingly difficult.
Why do high-quality products so often fall into price competition, while services that offer a distinctive experience manage to build unique markets of their own?
Drawing on lecture materials from FOURDIGIT Service Design School, this article explores how the source of value is changing in the digital age.
1. The Speed of Technology Adoption and the Inevitability of Commoditization
Advances in digital technology have fundamentally reshaped product lifecycles.
In the past, simply being "new technology" could secure a long-term advantage. Today, global supply chains and standardization have dramatically accelerated imitation. Data from major digital consumer electronics shows a clear pattern: prices drop sharply just a few years after launch, often falling to nearly half of their original level.
As seen with flat-screen TVs and DVD recorders, functional value—specifications and features—becomes "normal" the moment it spreads across the market. Commoditization is unavoidable.
Feature-based differentiation may deliver short-term first-mover gains, but it rarely turns into lasting brand equity. This is the structural challenge modern businesses face.
2. Redefining Value: Digital Cameras and INSTAX
A symbolic example of this shift can be found in the digital camera market.
Once defined by competition over megapixels and zoom, the market shrank as smartphones became widespread, effectively replacing cameras in terms of convenience and functionality. Yet within this decline, Fujifilm's instant camera brand INSTAX (Cheki) carved out a unique position.
Measured purely by image quality, INSTAX cannot compete with modern digital devices. What it offers instead is something different: the experience of a photo appearing instantly and being shared with others.
"Don't just take, give."
This concept redefined the camera's value—from a recording device (function) to a communication tool (experience). By creating meaning on a different axis from technical specs, INSTAX established a strong market presence, with sales continuing to grow independently of broader digital camera trends.
3. iPod and the Design of "Integration"
Apple's iPod did not win through hardware specifications alone. MP3 players existed before it. What Apple designed was seamless integration.
- Hardware: refined form and intuitive controls
- Software (iTunes): elimination of music management friction
- Platform (Store): secure, per-song purchasing and piracy control
- Promotion: iconic presentations by Steve Jobs and memorable campaigns
Business, technology, and creativity were integrated coherently around a single focus: the music experience.
The result was not just a playback device, but a new lifestyle—music that could be carried freely and enjoyed almost endlessly. Design here is not decorative styling; it is the intentional act of integrating disparate elements into a harmonious experience.
This success paved the way for the iPhone.
4. Designing "Meaning"
In a society saturated with products and largely free from functional dissatisfaction, people increasingly pay not for the product itself, but for the meaning behind it.
- How does this service enrich my life?
- What values does choosing this brand express?
Consumers make these choices implicitly and nonverbally.
What business leaders must envision is not only what to build with technology, but why it matters to users. Design translates business logic and technological potential into the human context of meaning and emotion.
5. Conclusion: Elevating Technology into Experience
As AI and emerging technologies accelerate functional advancement, commoditization will only intensify. Technology is a means, not an end—and it will always be matched.
What matters is not how advanced a technology is, but what kind of joy, reassurance, or meaning it brings to human life.
To avoid being swallowed by commoditization and to sustain long-term value, improving functionality must go hand in hand with designing experiential value.
This article is based on content from FOURDIGIT Service Design School.
For more information, please feel free to contact us.
