Economist Joseph Schumpeter has been credited with popularizing the term "creative destruction," which was his way to describe capitalism and the manner in which a new idea or technology will replace an established or existing one. The technology industry has proven this concept repeatedly, with products continually facing extinction as newer and more innovative rivals take their places. Below are four more recent examples of products that face the threat of extinction from technology shifts.

For more information, check out "Who are Apple's (AAPL) main competitors in the tech industry?"

GPS Devices
The GPS device, which consumers have widely adopted as a standalone gadget to be installed on the dashboard of a vehicle has quickly given way to GPS software that comes preloaded on a smartphone or tablet computer. The wide availability of wireless data services also means that directions and traffic can be downloaded in real time, which has made the pre-loaded functionality of earlier GPS devices almost completely obsolete. Regulation that is making the use of mobile phones while driving illegal could help keep standalone GPS devices from becoming completely extinct, but demand has fallen sharply as the latest software is largely available for free for many consumers.

Watching Movies
Technologies that allow consumers to watch movies at home have evolved constantly over the past three decades. The advent of Beta and VHS movies and related playing devices in the 1980s eventually shifted to digital video discs, or DVDs in the 1990s. More recent developments have seen the introduction of high definition DVDs, with the Blu-ray disc technology having been adopted as the standard. This has given way over the past couple of years to streaming technologies that allow consumers to watch films online by either paying a subscription for a library of titles, or paying to watch a single movie over a set period of time. With increasing bandwidth of wireless data services, the DVD could soon face its own extinction.

Listening to Music
The manner in which consumers access and listen to music has followed a similar path to the manner in which they watch movies. Cassette players quickly gave way to compact discs (CDs), which just as quickly gave way to the iPod and ability to store and retrieve music from a digital library. The shift to streaming is currently taking place where consumers have the option of paying an annual or monthly subscription for the right to access a library of music. Free subscription options also exist for consumers willing to listen to commercials instead of paying a fee. CDs are quickly going extinct, as is traditional radio, where consumers have little ability to customize what music they listen to. (To learn more about music, see Facing The Music: The Recording Industry's Power Struggle.)

Using Software
The traditional software business model has consisted of the creation of a full software system that is purchased by a consumer or business through either a digital download or download from a physical disc that resembles a DVD. Then, every few years, the software developer would release a newer version that the user would have to purchase again, if he or she wanted to obtain the new functionality.

Over the past couple of years, more innovative software programmers have offered cloud-based computing that users access over the Internet. Instead of being stored on a user's hard drive, the software is instead located on a centralized server where updates can continually be added by the developer. The shift could create subscription-based software models and make the traditional business model obsolete.

The Bottom Line
For consumers and related users of technology, the extinction of products and newer, better alternatives is a welcome form of creative destruction. For the underlying firms creating and selling the older technologies, it can mean extinction. For this reason, firms do their best to evolve or offer a diversified mix of goods and services that can help them survive. Those that are able to adapt to a quickly evolving system of creative destruction can end up making quite a bit of money for their owners. (For related reading, check out Why You Shouldn't Buy New Tech Toys.)

Related Articles
  1. Home & Auto

    Luxury Cars with the Best Resale Value

    Autos rarely appreciate in value. But if you want a set of wheels that'll least hold its value over time, these cars can go the distance.
  2. Stock Analysis

    How Expensive Is Whole Foods, Really?

    Learn about Whole Foods Market, Inc., and discover how Whole Foods pricing actually compares to that of other grocery store operations.
  3. Stock Analysis

    4 Quick Service Restaurants for Your Portfolio

    Learn about the four quick service restaurants with attractive investment theses and growth prospects that can be valuable additions to your portfolio.
  4. Stock Analysis

    What Makes the 'Share a Coke' Campaign So Successful?

    Understand how Coca-Cola implemented the successful "Share a Coke" campaign. Learn about the top three reasons why the campaign was successful.
  5. Stock Analysis

    The 6 Best Dividend Stocks in the Consumer Staples Sector

    Learn about the top six companies that make an attractive investment for investors looking for stocks for dividend income investing.
  6. Mutual Funds & ETFs

    Top 3 Consumer Cyclical Mutual Funds

    Obtain information on, and analysis of, some of the best performing mutual funds that offer exposure to the consumer cyclicals sector.
  7. Investing

    Procter & Gamble Restructures, Sheds 100 Brands

    All businesses face adversity, and Procter & Gamble is no exception. We take a look at recent developments affecting this global giant.
  8. Economics

    Explaining Manufacturer’s Suggested Retail Price

    The manufacturer’s suggested retail price (MSRP) is just what it describes – the price manufacturers recommend that retailers charge for their goods.
  9. Economics

    Calculating Cross Elasticity of Demand

    Cross elasticity of demand measures the quantity demanded of one good in response to a change in price of another.
  10. Personal Finance

    What to Collect: Apple Watch vs. Luxury Watches

    The "iWatch" is a new player in the luxury watch world. But will it stand the test of time? Some points for collectors to ponder.
  1. What is Apple's current mission statement and how does it differ from Steve Job's ...

    Apple's current mission statement is "Apple designs Macs, the best personal computers in the world, along with OS X, iLife, ... Read Full Answer >>
  2. What companies will be hurt the most by Apple's latest product plans?

    As of 2015, Apple's latest product plans pose a challenge to rivals across several industries. These competitors include ... Read Full Answer >>
  3. How did Tim Cook become head of Apple?

    Tim Cook became the chief executive officer of Apple in August of 2011 after the death of founder and CEO Steve Jobs. His ... Read Full Answer >>
  4. How does Tim Cook's vision for Apple differ from that of the late Steve Jobs?

    Before his death in 2011, billionaire tycoon Steve Jobs handed over control of Apple to Tim Cook, then the company's Chief ... Read Full Answer >>
  5. Who are Apple's (AAPL) main competitors in the tech industry?

    The range of products and services offered by Apple Inc. (AAPL) is broad, and the company is a fierce competitor in several ... Read Full Answer >>
  6. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!