Technological Lifecycle

[PMCD]
Every technology goes through 4 different stages in its lifecycle as they move from the invention stage, onto the niche stage and ultimately to become a ubiquitous, breakthrough technology.

As Chris Anderson shares in the history of innovation shows, the arc of nearly all important technologies is defined by four milestones. Call them collisions.

Critical Price
The first is when a technology collides with a critical price. That price is often a psychological
threshold - a drop below $1,000 enables a product to make the move from office to home,
say, or below $400 to move from early adopters to the mainstream.

For instance,
sales of VCRs reached 10 million a year when their average price fell below $400. Fifteen years
later the DVD player, which did not offer as radical an improvement in consumer benefit, had to
fall further - to $200 - to sell as many units.

Critical Mass
Almost all technologies exhibit price elasticity - as the price falls, sales rise.
So Collision 1 tends to lead to Collision 2, breaking out of the technophile core to the mainstream.
Critical mass is that moment when you go from reading about a tech to knowing people who use it, when word of mouth gets going.
This moment varies from market to market. For many consumer products, it’s at about 20% of
homes; for business tech, it’s at 10% of offices, which are often more conservative.

Displacement / Disruption
When a technology on the way up hits one on the way down (as LCD’s are doing to CRT monitors, and broadband to dial-up).
These are cases where a markedly better system has arrived to serve the same market.

Commoditization.
Many products become commodities as they mature and their price approaches zero.
Think of the cost of a megabit of storage or a Wi-Fi chipset.

The former leads to what would once have been considered frivolous: carrying 10,000 songs in
your pocket. The latter leads to ubiquity, in the form of Wi-Fi built into every laptop and soon
everything from phones to stereos, the building blocks of a wireless future.

In both cases, the super-abundance of silicon chips and megabits created new products, features, and markets previously unimaginable.