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How do you sell more computers to more people when almost all of us already own one? Recent and ongoing innovations in the computer industry provide a fascinating answer to that question: rethink the idea of nonconsumption.

In The Innovator’s Guide to Growth, Scott Anthony, Mark Johnson, Joe Sinfield, and Elizabeth Altman describe a presentation for a major cable broadcasting company during which an audience member said of nonconsumption, “More than 90 percent of U.S. households subscribe to cable television. I don’t see how this concept applies to us.” The speaker replied, “How frequently do people watch your programs when they aren’t sitting at home in front of their television?” Instead of conceiving of consumption narrowly and focusing on bringing cable TV to more houses, the authors suggest, the company might consider offering video in new contexts such as PCs or mobile phones.

In other words, considering consumption in terms of people (am I a consumer or not?) can be much less informative than considering it in terms of contexts (are there circumstances in which I could be consuming but am not?).

Although the vast majority of people in the developed world own (or at least have access to) a personal computer, there is still a great deal of nonconsumption in the computing space. Until fairly recently we were all nonconsumers of computers and Internet access in places like airport terminals, taxis, and sidewalks. Innovations expanded consumption: smartphones and netbooks are making the Internet and productivity applications available not necessarily to new consumers of computers or new segments of the computer market but rather are making them available in new contexts.

A nascent project may soon expand consumption to public spaces and group settings in which computer use (a generally solitary activity) rarely occurs today. Microsoft’s Surface project was famously mocked when it first became public, but now the – ahem – tables have turned as the massive touchscreens are being introduced as part of a pilot program in Sheraton hotels in five cities.

It is easy to imagine an enormous variety of other applications: Surface computers installed as interactive product displays in retail outlets; as automated ordering devices in tables at restaurants; as game-playing and Internet-accessing time-passers in transit stations; as board games, message centers, and media consoles in homes… Some of these ideas may turn out to be optimistic or unrealistic, but broadly speaking Microsoft is on the right track as it prepares a device designed to bring interactive computing to nonconsuming contexts.

These and other products are strong evidence of both established manufacturers’ and new entrants’ willingness to explore and tap into the circumstances in which computers are not yet being used. This understanding – that nonconsumption is contextual and highly relevant even in markets that appear to be saturated – should continue to lead to robust growth in the computer industry.

The recently christened “netbook” market has exploded over the past year as new entrants and established computer manufacturers have released a bevy of new, inexpensive products into the disruptive category.

Netbooks, relatively small and very inexpensive notebook computers designed primarily for mobile Internet connectivity and useful for little more than browsing, e-mail, and running productivity software, fit nicely in a niche for consumers who have been simultaneously overserved by traditional laptops and underserved by high-end smartphones.

If this niche seems familiar, it should. Manufacturers have struggled to shoehorn attractive products into this niche for years, but until recently they tended to be unwilling to aim low enough on features or on prices.

Some have sought to fill that gap by focusing primarily on size and producing ultra-slim laptops with feature sets (and price points) comparable to those of larger computers. Lenovo’s X Series and the $1799 MacBook Air, for instance, actually charge a hefty premium for providing features similar to those of a midsize laptop in a more portable package.

Microsoft, on the other hand, was more willing to limit features and provide a “good-enough” product when it developed its “Ultra-Mobile PC” platform (known as Origami), but Origami-powered devices failed to catch on as high prices (not to mention horrific usability problems) turned potential customers away.

Netbooks, however, seem more attractively positioned than these products, and they have great potential to disrupt the laptop industry. Consider, for example, Acer’s new Aspire One, now widely available for $379. It’s hopelessly outgunned by pricier laptops: its screen is small, it runs Linux instead of Windows, it comes with relatively little RAM, its processor is slow, and its solid state drive is Lilliputian.

But those shortcomings aren’t terribly important to consumers when their goals are simply portability, connectivity, and productivity at a low price; an ultra-portable that can run Crysis is ludicrously overwrought in comparison.

It seems very likely to me that there's much more expansion in store for this segment of the computing market as manufacturers introduce still more products, the cost of computing power continues to decline, and consumer awareness of these options grows.  I'll be curiously watching as the low-end disruption develops.

Earlier this year on InnoBlog, Natalie Painchaud discussed the ASUS Eee Surf's potential to be used as a second computer for families.

Innovation inspiration can come from outside the business world. Today's source of wisdom: The Simpsons. Today's lesson: Be wary of peddlers offering skin-deep fixes for deeply rooted innovation issues.

Companies looking to boost their abilities to innovate routinely turn to companies that seem to have solved the innovation equation for inspiration. They observe elements of the company's environment (free food! no doors! online jam sessions!). They seek to mimic those environmental elements to get similar results.

The problem is that a "culture of innovation" involves much more than these superficial elements. In fact, my colleague Steve Wunker is fond of saying that culture is a lagging, not a leading indicator. Changing culture requires changing activities. Changing superficial stuff without changing the real stuff doesn't accomplish much.

If you have trouble remembering this, think back to the episode of The Simpsons when, after a random bear sighting, the town of Springfield invests heavily to guard against future "attacks." The town thinks the heavy investment pays off, because bear sightings drop by 100 percent.

Read the rest at Scott's Harvard Management blog, Innovation Insights.

Back in April we announced the launch of our new website, complete with the 2007 archives of Strategy & Innovation. Now we have even more good news for those looking for resources on disruptive innovation — we now have available for free on our website the archives of all the Innosight-owned content of Strategy & Innovation. That includes all issues from September-October 2005 through May-June 2008 (we are in negotiations with Harvard Business Press to complete the archives all the way back to the 2003 launch).

The launch of the archives is part of a larger set of changes for Strategy & Innovation. The July-August issue, which will ship to subscribers in two weeks, will be the last print, paid-subscription issue of the newsletter. Starting in September, we will publish a smaller, biweekly newsletter — again, for free.  If you're interested, please register at our website.

Also, Innosight has just launched the Innosight YouTube channel with 14 videos of Innosight partners Scott Anthony, Mark Johnson, and Joe Sinfield talking about disruptive innovation and their book The Innovator's Guide to Growth. The book also has a Facebook page with an ongoing discussion.Check it out!

One of the excellent editors at Harvard Business Publishing forwarded me a link to a BBC article in an email with the subject line: "Could Windows by Disrupted?" I didn't have to click on the link to know the answer is yes.

You see, everything could be disrupted. The important question is will disruption play out in a way that favors or kills the incumbent market leader? The real interesting question is "Will Microsoft disrupt Windows?"

The forces of disruption are at work in every industry. It can happen more quickly in some industries than others, but the potential is omnipresent. And as Clayton Christensen pointed out in his seminal book The Innovators' Dilemma, market leadership isn't just an insufficient buffer against disruption, in some cases it is the root cause of failure.

Consider the management classic In Search of Excellence. While some of the companies featured in the book continued to excel after it was published, companies like Amdahl, Atari, Data General, Digital Equipment Corporation, Eastman Kodak, and Kmart all encountered serious difficulties. In fact, an analysis by IMD Professor Phil Rosenzweig in his worthwhile read The Halo Effect found that the average "excellent" company from In Search of Excellence generally under-performed the stock market in the years after the book's release.

What about Microsoft? ...

Read the rest on Scott's Harvard Management blog.