Visualising an iLifeycle

The take-up speed of new technology or products is an important issue for any firm involved in innovation-driven industries.

We typically argue in the early stage of industry or product life cycles firms will battle it out to produce the dominant technology, and the winner(s) will then ride the growth wave as consumers rush in and profits soar. Finding data on such processes it not always easy.

The two slides discussed in this Techcrunch blog post looking at the uptake and impact of Apple’s iPhone and iTouch are illuminating.

The first shows the speed at which various comparable technologies were taken up in their respective markets (in (admittedly crude) terms of number of products shipped):

Source: Morgan Stanley Internet analyst Mary Meeker vis Techcrunch

Source: Morgan Stanley Internet analyst Mary Meeker vis Techcrunch

What is apparent is the huge appetite for Apple’s new offerings relative to (i) its big competitor in the smartphone domain (Blackberry) and (ii) their precursors in the i-world, the iPod. No wonder Apple is more profitable than ever. Of course, you could also argue that Apple is leveraging off the harder fought gains of these precedents in terms of building consumer interest and confidence with such products… but that IS what the life-cycle idea argues too.

A neat little aside to this discussion is seeing what impact such huge market growth has on suppliers/complements. This slide looks at the upswing in mobile data traffic on the major telecoms network in the US:

Source: Morgan Stanley Internet analyst Mary Meeker vis Techcrunch

Source: Morgan Stanley Internet analyst Mary Meeker vis Techcrunch

Now that’s a nice trickle-down effect!

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