InsightaaS: Across the Net regularly highlights posts from Horace Dediu’s ASYMCO blog, an important source of information on issues pertaining to Apple and to the smartphone and related markets generally. In this post, Dediu overlays analysis of US smartphone adoption with a logistic function that can be applied – and is, in an informative graph contained in the text – to many other innovations, including phones, electricity, cars, radios, dishwashers, PCs and several other product categories.
Dediu’s core point is that the curve should be helpful in providing “the answer to building a successful and sustainable enterprise,” but that in practice, “it has not proven to be the case.” Changes in the supplier community are also evident in the data, with “all the early movers [being] highly disadvantaged and even some of the later entrants are not assured of viability.” It seems – to Dediu, and from his analysis – that “as a technology takes root we might be able to predict how it gets bought but not who will sell it” – which leads to the definition of an investor’s dilemma: the key question is “not whether a company is in the right market, but whether it’s in the right time.” into the later stages of the market.
At the end of October 2014 about 73% of US mobile users owned a smartphone. In March of 2005 2% of US mobile users owned a smartphone (comScore). In absolute terms the number of users increased from about 4 million to 176 million and these 172 million new users were added in less than one decade.
Remarkable as that may be, what is even more exciting is that the pattern of adoption is predictable. The following graph charts the adoption of this product category with a monthly resolution between January 2010 and October 2014…
The logistic function is a wonderful model for how technologies are adopted. It’s been evident in samples take for dozens of diffusions, from 18th century canal construction, 19th century railroads, 20th century consumer products as well as industrial and agricultural innovations and the internet itself.
The reason the logistic curve is so commonly observed is because of its reflection of sociological behavior. When a technology serves a manifest need (or can be hired for a distinct, unmet job to be done) its universal adoption is a certainty. The only unknown is the rate at which this happens…
