IT Waves: Two Completed Generational Diffusion Models

Information technology (IT) products and services, as well as many others, are released in successive generations that diffuse in wave-like patterns. The first generational model of such phenomena, the Norton-Bass Model, has been limited by conflicting views of what exactly it models, conflicting views on its properties, the belief by some that it has an inherent inconsistency and the fact that the model did not identify several desirable aspects of the modeled phenomena. This situation has developed largely because the Norton-Bass Model is actually two models in one, neither has been completely derived, and one of the models has never been rigorously defined and clearly differentiated from the other. This paper corrects these limitations. We define the quantities required in a “complete” generational diffusion model as the first step in completing the classic Norton-Bass as well as its newly defined Embedded Model. We estimate the newly defined model with two generations of wireless telephone subscribers, four generations of computer systems in use, two generations of copier sales and nine generations of DRAM sales. For all empirical cases we calculate sales, adopters, systems in use, switchers, leapfroggers, diffusion of the base technology, replacements, the cannibalization factor and other newly identified quantities.