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In June 2007, twelve days before the iPhone shipped, BusinessWeek asked Clayton Christensen what his own theory said about the iPhone's chances of success.

"Apple won't succeed with the iPhone."

His prediction was grounded in his own theory for how disruption actually works: entering from the bottom of a market, or from a market that didn't exist yet. Measured against the handset market Nokia and BlackBerry controlled, the iPhone entered from neither position, and yet it still put an end to both companies.

Measured against a different market, the same iPhone was disruption in Christensen's own sense. Not everyone owned a Garmin device for navigation before 2008. Now nearly everyone carries a phone that gives turn-by-turn directions for free. "Disruptive" and "sustaining" aren't fixed properties of a product. They're answers to the question "compared to what," and the iPhone earns both answers at once.

Here’s what you’ll find:

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Twelve days before Apple shipped the iPhone in June 2007, BusinessWeek's Jena McGregor asked Clayton Christensen what his own theory predicted for the iPhone.

His answer, on the record:

In hindsight, we now know the iPhone as one of the most disruptive products of the last twenty years. By mid-2025, Tim Cook was telling analysts the iPhone had crossed 3 billion units sold since its 2007 launch. Nobody had to choose which market to compare the iPhone against back in 2007. But what if I told you that both the popular verdict and Christensen's are correct…because they're answering different questions about different markets.

"Disruptive" and "sustaining" aren't fixed properties of a product. They're answers to the question "compared to what?" A product called the iPhone gets compared to phones by default. The comparison nobody made at the time was holding the iPhone up to GPS devices, or to point-and-shoot cameras.

Christensen's theory gives disruption two entry points: from the bottom of a market, undercutting an incumbent's price, or from a gap in the market, where an incumbent has no product at all. Canva reached 170 million people Adobe never built a product for, entering that market from the bottom instead of the top (Disruption Is Not What You Think). Square undercut the big payment processors on price, winning merchants that existing processors had no reason to chase (The Disruption Test).

Compared to Nokia and BlackBerry devices, the iPhone was sustaining innovation. It launched at $499 or $599 on a two-year AT&T contract, aimed at the same premium and business buyers the incumbents already had, competing on features and polish instead of price.

Compared to Garmin, or to Canon and Nikon's point-and-shoot cameras, the iPhone was massively disruptive. Once Apple put a GPS chip in the iPhone in 2008, turn-by-turn navigation reached people who had never bought a dedicated GPS unit, at no added price, bundled into a phone they were already buying. The built-in camera did the same thing to a photography market Apple never tried to enter.

Both fit Christensen's second entry point, a gap in the market nobody else was serving. Against Nokia and BlackBerry, the iPhone struck out on both entry points at once. Not cheaper. Not reaching anyone the two companies weren't already selling to.

In 2008, a year after Christensen's interview, Glen Schmidt and Cheryl Druehl published a paper in the Journal of Product Innovation Management that split the way a new product can take over a market into two directions. Low-end encroachment starts cheap and simple, then improves upward, which is just Christensen's disruption under a different name. In contrast, high-end encroachment runs the opposite direction. A premium version launches first, for customers willing to shell out for top-of-the-line features, and cheaper versions diffuse down toward the mass market afterward, as production scales and the same performance gets cheaper to build. Schmidt and Druehl's own example is Intel's Pentium chip.

Christensen used that same chip line himself, eleven years earlier, in the opening chapter of The Innovator's Dilemma. He cited Intel's climb from the 8-megahertz 8088 in 1979 to the 133-megahertz Pentium in 1994 as sustaining innovation, pushing performance higher for the customers Intel already had. Schmidt and Druehl gave that same pattern a name, high-end encroachment, and showed it can take over an entire market from the top down, the same way disruption takes one from the bottom up.

Nokia's own strategists saw high-end encroachment coming a year before Schmidt and Druehl gave it a name, and they got it wrong. The day after Steve Jobs unveiled the iPhone at Macworld on January 9, 2007 (five months before Christensen's interview) an internal Nokia presentation flagged three limits on the iPhone: a high price, a virtual keyboard instead of a physical one, constrained to one carrier.

The iPhone, Nokia's own presentation read, "may stimulate high-end demand in general, helping everybody to grow volumes in the high price band." That sentence describes high-end encroachment exactly: a premium competitor enters at the top of a market an incumbent already dominates, and the incumbent's own volume in that price band rises anyway, because the new competitor just started selling into it too. Nokia called the rising volume good news instead of the warning it was. They bet their hardware, market reach, and pricing playbook still gave them the edge, and defended that bet with the assets in place: their existing Symbian software and a carrier deal with T-Mobile.

Nokia's mistake wasn't missing the threat. Their own presentation named the threat a year before academics gave it a name. The mistake was reading a growing market as an opportunity to maintain their already-healthy share. Total sales in that price band kept climbing because Apple had started selling into it too, even while Nokia's share of those sales was already falling. Nokia watched the total climb and never checked its own share of it.

Nokia held about half the global smartphone market in 2007. By 2013, it held about 3%. The 47% they lost was the cost of watching the iPhone's arrival and calling it evidence that the whole market would grow.

BlackBerry ran its own version of the same mistake. After watching the same Macworld keynote, Mike Lazaridis told his co-CEO, Jim Balsillie, the iPhone demo was worth taking seriously. Balsillie's answer: "It's OK. We'll be fine."

"Apple won't succeed with the iPhone."

Christensen compared the iPhone against the existing mobile phone market using the only mechanisms his theory tracks: enter from the bottom, or from a gap nobody's filled. The iPhone did neither, so Christensen classified it as sustaining innovation, not disruption, and predicted Apple would fail.

Through that lens, he was right about the classification. But Nokia and BlackBerry still lost their entire market to the iPhone, because bottom-up disruption is only half of how a market can be overtaken. High-end encroachment is the other half: a premium product enters at the top of a market and leverages premium features and early adopters to fund continued development, pushing prices down and enabling down-market competition.

Christensen's framework has no way to flag that danger.

The iPhone is particularly unique in that it executed both low-end and high-end encroachment in the same launch. Against Garmin and the camera makers, it filled the gap Christensen's theory is built to catch: turn-by-turn navigation and a built-in camera, bundled as “free” features into a phone people were already buying, reaching people who'd never owned either product before. Against Nokia and BlackBerry, it did the opposite, competing for the same premium buyers those two companies already had instead of reaching anyone new. Both encroachments worked, but only one was ever going to show up in traditional disruption theory.

Nokia's memo and Christensen's theory reached the same verdict about the iPhone from opposite directions. Neither one saw a threat, because neither one checked past the obvious market for the new device. It was, after all, called the iPHONE. Nokia and BlackBerry lost that market anyway.

Before you trust your next "not disruptive" verdict, on a rival or on your own numbers, ask what danger that verdict actually checked for, and whether "safe" is doing the same false work here that "sustaining" did to Nokia.