As product innovation becomes more distributed, it becomes increasingly important to understand how value is captured, and how this is liable to change over time as markets and technologies evolve. This paper examines the case of the digital projector and the product development efforts of one company, Philips, from its initial market entry in 1996 to eventual exit in 2004, as it tried to make the transition from office equipment to home theatre markets. The paper discusses these results in the context of a preliminary framework for product innovation in the electronics industry, and concludes with a consideration of implications for theory and practice.