We will talk in more detail about how technology is adopted, but suffice it to say that some people are more comfortable with new things than other people are.  Most of us have heard of “early adopters”, “laggards” and the like.  Figure 1 [http://en.wikipedia.org/wiki/File:Diffusion_of_ideas.svg] shows the classic bell curve of technology adoption; time moves to the right, and by the time you reach the far right side, the entire population has adopted.  The purple line is the adoption rate at a given instant; the yellow line is the cumulative percentage of the population that has adopted the technology.

A simple way to look at this model is that people on the left like to use new things, and the people on the right do not.  The further left on the graph, the more eagerly they will seek out and try innovative products; the further right, the more they will actively resist.

Figure 1:  Classic Technology Adoption Curve

Figure 2 shows what happens at various stages in this adoption cycle, as seen from the point of view of the company supplying the technology.

Figure 2:  Description of Progression

1. As a technology (or, more accurately, a product based on a technology) is introduced to the market, a small cadre of early adopters starts buying, and the company starts to enjoy some success.
2. Being a technology company, you continue to improve the product, and you are selling a lot more.  The future looks bright.
3. Your peak growth rate happens just as you saturate the market for people who like new things.
4. (4a, actually) By the time you get your product here, you have improved it to the point where it is overwhelming to the people in this segment.
5. (4b, actually) By the time you get your product here, the early adopters have moved on to something else – your product is uninteresting, maybe even considered a commodity.

This diagram describes one of the fundamental challenges of strategy in technology-based industries: how to create value for a variety of constituencies, each of whom have different definitions of value, and whose definition of value changes with time.