Chapter 9

Forecasting with Innovation Diffusion Models: An Updated Example from the Telecommunications Industry 1994-2009

John F. Kros and S. Scott Nadler

Abstract

Managers have long been concerned about new product development and the life cycle of these products. Because many products do not sell at constant levels throughout their lives, product life cycles must be considered when developing sales forecasts. Innovation diffusion models have successfully been employed to investigate the rate at which goods and/or services pass through the product life cycle. This research investigates innovation diffusion models and their relation to the product life cycle. The model is developed and then tested using modem sales from 1994–2009. Each successive generation of modem innovation, from 14.4k, 28.8k, 56k, broadband less than 3.6Mbps, to broadband greater than 3.6Mbps, is examined.

Total Pages: 159-172 (14)

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