The discovery of a product or process is called

Kate, the president of a company that makes electronic devices, borrows a large sum of money from the local bank to purchase machinery to make its latest line of smartphones. Smartphone technology is expected to ultimately make cell phones without PC$-$like functionality obsolete.

As depicted in the above scenario, which of the following is an example of creative destruction?

The purchase of machinery used to make smartphones

Traditional cell phones exiting the market because of the introduction of smartphones

The new machinery used to make smartphones