Technology cycles in the computer peripherals sector: a test of the demand heterogeneity theory

This study set out to test the claims of demand heterogeneity theory (Adner & Levinthal, 2001) regarding the dynamics of demand cycles in the personal computers graphics cards sector. The demand heterogeneity theory claims that technology firms continue to engage in product innovation in mature product classes and offer products featuring increasing performance at stable prices. Adner and Levinthal (2001) posit that the answer to this phenomenon lies in the demand context: technology that meets consumers' functionality and net utility thresholds leads to the emergence of technologically satisfied consumers. In the face of satiated technological needs, firms engage in product differentiation strategies and continued innovation due to fierce competition for technologically satisfied consumers. The consumers in turn enjoy additional functional benefits and luxurious bargains. The theory is based on mathematical modeling and remains empirically untested in the management science literature.

Technology cycles in the computer peripherals sector: a test of the demand heterogeneity theory

This study set out to test the claims of demand heterogeneity theory (Adner & Levinthal, 2001) regarding the dynamics of demand cycles in the personal computers graphics cards sector. The demand heterogeneity theory claims that technology firms continue to engage in product innovation in mature product classes and offer products featuring increasing performance at stable prices. Adner and Levinthal (2001) posit that the answer to this phenomenon lies in the demand context: technology that meets consumers' functionality and net utility thresholds leads to the emergence of technologically satisfied consumers. In the face of satiated technological needs, firms engage in product differentiation strategies and continued innovation due to fierce competition for technologically satisfied consumers. The consumers in turn enjoy additional functional benefits and luxurious bargains. The theory is based on mathematical modeling and remains empirically untested in the management science literature.