Architectural innovation refers to the process of reconfiguring existing technologies and systems to create new products or services. This type of innovation often involves changing the way components are arranged or integrated, leading to improved performance or new functionalities. For example, the introduction of smartphones transformed traditional mobile phones by integrating various technologies like cameras, internet access, and apps into a single device. This innovation is crucial in industries such as automotive and software, where companies must adapt to changing consumer needs and technological advancements. By rethinking how different elements work together, businesses can develop solutions that stand out in the market and drive growth.