"There’s an old saying that the first fifty years of the car industry were about creating car companies and working out what cars should look like, and the second fifty years were about what happened once everyone had a car - they were about McDonalds and Walmart, suburbs and the remaking of the world around the car, for good and of course bad. The innovation in cars became everything around the car. One could suggest the same today about smartphones - now the innovation comes from everything else that happens around them."
From Benedict Evan's article titled "What comes after smartphones?" (emphasis added)
To summarize, the first wave of innovation is about better hardware--such as a better engine, a better camera, or a better design. On the other hand, the second wave is about services and software that the hardware could support and bring to customers. Then, the question is: how could a company that solely invested in the hardware innovation make a shift for the next innovation required to stay at the top?
The aforementioned article reminded me of Google's Pixel phones and Amazon's Echo speakers. Google and Amazon had the services they could provide with their devices before breaking into the smartphone industry and the smart speaker industry. They had the second wave of innovation in their minds when they decide to ride the first wave.
I can see myself coming back to this framework when I see future business cases.