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Technology Adoption Curve

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Speaking of the Apple iPad – here is a typical technology adoption Life cycle

Here are the six stages to consider:

Early Market. When a disruptive innovation is first introduced, it initially attracts the attention of technology enthusiasts (who see it as cool) and visionaries (who see it as potentially disruptive). The category is given a name, but it is not yet clear if it will be just a flash in the pan.

The Chasm. Having now been in the marketplace for some time, the offer has lost its novelty; visionaries no longer see it as a source of dramatic competitive advantage and pursue disruptive opportunities elsewhere. As a result, the market stalls.

Crossing the Chasm. The only reliable way to exit the chasm is to target on the other side a niche market made up of pragmatists united by a common problem for which there is no known solution. These pragmatists are motivated to help the new technology cross the chasm if it is packaged as a complete solution to their problem.

Bowling Alley. In this phase, the technology has gained acceptance among pragmatists in multiple-niche markets where it enables genuine solutions to uncommon problems. Within adopting niches, the new paradigm builds a loyal following among those who see a market in the making. Outside the niches, it is becoming more widely accepted by the general public.

Tornado. The technology has proved its usefulness in niche markets and, in the process, a killer app has emerged — something that makes it both broadly applicable and highly attractive to a mass audience. Overnight it becomes perceived as necessary and standard.

Main Street. The initial surge of hyper-growth subsides, leaving behind a market-share pecking order that is likely to persist for a long time to come. Customers have selected their vendor of choice and are now focused on deploying the technology more broadly.

Category-Maturity Life Cycle

The technology adoption curve is just part of the larger Category-Maturity Life Cycle

Here is a bigger picture of how categories of products live their life in the marketplace

The model comprises five phases: (A) New Category Initiation, (B) Growth Market, (C) Mature Market, (D) Declining Market, and (E) End of Life.

After Assimilation The technology-adoption life cycle comes to an end once the marketplace has completely assimilated the disruption that triggered it.

Phase B, Growth Markets. Even though the technology has been thoroughly assimilated, the offerings it has spawned remain in high demand for a while longer. This is an exceedingly pleasant time to be a manager because you are presiding over what is essentially category growth generating superior economic returns while entailing little company-specific risk.

Phase C, Mature Markets. Category growth has flattened, and commoditization is under way. In Darwinian terms, the boundaries of the niche have been reached and the category is experiencing the condition of scarcity for the first time. Growth must come from increasing the yield from the current customer base, or growing it at the expense of another competitor. Natural selection ensues with a wave of consolidation thinning out the bottom of the pecking order.

Phase D, Declining Markets. The category has become completely boxed in, innovation opportunities harder to find, and even those that dominate the market are experiencing difficulty in creating attractive returns. The market is ripe for some form of disruption, either through an obsoleting technology or radically innovative business model.

Phase E, End of Life. A disruptive technology has emerged and made significant inroads. As a consequence, the incumbent technology has been rendered obsolete. The only customers left are conservatives and laggards. This is a classic time to take a company private to harvest the remaining economic value in the category, brand, distribution channel and customer relationships.

You can use the above models to find out where technologies, products, and product categories are in their life cycle and where they are naturally headed – unless some intervention is made by company category, product, or brand managers.  Think about where these might be in their life: vinyl records, CD’s (music and data), Zip Drives, MP3 players, public telephones, VoIP, Netbooks, Tablets (iPad, Slate), Rental Video Stores (Blockbuster), Netflix, and many more.

Read a related posting on what happens to innovative technology – The Rise and Fall of Iridium

MeToo MeToo !!  Another Early Market entrant – headed for the Chasm or flash in the pan?

 [Youtube=http://www.youtube.com/watch?v=AeDalRBjyJo]

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Written by frrl

April 6, 2010 at 4:53 pm

Posted in Uncategorized

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