Here's a textbook example of the core phenomena described in Innovator's Dilemma at work.   MSNBC reports on a new joint venture between Honda and GE to produce new, low power jet engines. 

TOKYO - Honda Motor Co. and General Electric Co. agreed on Monday to jointly develop, produce and market a new jet engine for small business jets with the aim of becoming a major player in the growing market.

...Under the preliminary agreement, Honda and GE will market under a joint brand a compact business jet engine with thrust of 1,000 to 3,500 pound-force (lbf) to airframe manufacturers, to be mounted on jets that carry up to 10 passengers.

An aviationphile friend of mine once pointed out that new engine technology has historically been the key catalyst of new aircraft designs.  New generations of high bypass turbofans stretched the thrust / weight / economy envelope in a rather discontinuous fashion which enabled widebody jets, the 747, and 777 and so on.

The real leading indicator of where jets are going to go is to see were propulsion R&D is going.  Eclipse Aviation's fundamental, market-entry enabling innovation, for ex., is the decision to use engines from Cruise Missiles rather than traditional passenger jet engines to propel their plane.  Honda/GE's new engine will also hopefully fuel this new aircraft class - the AirTaxi.

What's cool from a business strategy point of view, of course, is that this new engine + plane won't be judged by / sold to traditional aircraft buyers.  This is a pretty different usage model with very different parameters for success.  Consequently, precisely as Innovator's Dilemma would predict, don't expect to see Airbus / Boeing take the pole position in airframe manufacturing for this class.  Their entire cost structure from head to tail just doesn't map to the kind of requirements an AirTaxi might have - that would be akin to asking Caterpillar to start building hybrid cars.

What's also interesting will be the degree to which incumbent businessjet producers such as Cessna and Learjet participate in this market - should it unfold.  Their cost structures are clearly much closer to what would be required but not necessarily 100% there.  The real wildcard, of course, is whether the leanest / meanest / highest volume metal benders in the world - auto manufacturers - will use this opportunity to get into high volume aircraft production.   Honda's interest certainly makes a lot of sense here...   They'll have a tough nut to crack in building out an apropos sales channel - an area where Cessna and Learjet do have a critical edge.

Honda's website has some picts, movies & info about the engine and the airframe - a pretty cool little bird.   Honda claims that their airframe is just a test harness for their engine development and not necessarily indicative of a public commitment.   Riiiight.....