The Right Way to InnovateRather than selling products you think people ought to buy, put out things they'll actually use.

Early digital cameras cost thousands of dollars and produced images most people wouldn't give a nickel for. Today, a few hundred dollars buys a digital camera with quality rivaling conventional photography. Yet last year, the most popular digital cameras were low-resolution snap shooters built into cell phones. Why didn't reasonably priced, high-quality products beat low-quality alternatives?

The answer lies in the reality of what recreational photographers are asking their cameras to do. These users aren't really focused on image quality, says Michael E. Raynor, a director at Deloitte Research in Toronto and co-author with Clayton M. Christensen ofThe Innovator's Solution: Creating and Sustaining Successful Growth. They're taking snapshots to share with friends and family, and low-resolution digital photos are easy to distribute electronically. Building the camera into a phone makes it even simpler. Says Raynor, "Digital camera-phones are better [for] taking pictures and sending [them] to your friends."