“The S-Curve maps the market penetration of a new product or technology, from marginal beginnings to mainstream popularity.” - Harry S. Dent, Jr.

A radically new product never lives up to market expectations in the early stages of its introduction to consumers. This was true of the automobile in 1910 and it was true of the cell phone in 1990. Sizzling technologies often appear to fizzle because only a small percentage of people are willing to try something innovative. We’ve even coined a term for them, calling such consumers “early adopters.”

Yet after an initial period of movement into niche markets, a new product suddenly catches on and its market share suddenly skyrockets. The product becomes indispensable and iconic: a symbol of what is current in today’s lifestyle. The acceleration is so rapid that it takes the same amount of time for a product to reach 90% of the market that it took to establish a 10% toehold. As we might expect, however, after it reaches 90% market share, growth tapers off.

This pattern of market penetration is reflected in a curvilinear model that Harry S. Dent, Jr. calls the S-Curve. “I came across it in the late 1970s and has successfully tested it against a variety of new technologies since then. It has consistently proven to accurately forecast how specialized products, services and technologies move from small niche markets into the mainstream,” said Mr. Dent.

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M. Dent has used the S-Curve to successfully forecast the growth of everything from radial tires to the Green movement.

Typically in the Innovation phase of the S-Curve, these unfamiliar products are expensive and downright difficult to use. Early adopters tend to be younger, urban and affluent and they provide important feedback for product improvement. Once the product hits the critical mass of around 10 per cent market share, we see the beginning of the Growth phase of the S-Curve. After it achieves 90 per cent market share, growth slows and the product enters its Maturity phase. At this point, the most conservative consumers begrudgingly adopt the product.

While the S-Curve is a great tool for predicting the acceptance of new technology, it even predicts the popularity of social trends! The Green movement, for example, began with a small, marginal group of environmentalists in the 1960s. The first Earth Day in April 1970 consisted of ragtag demonstrations that selectively made the news, but environmentalism didn’t start becoming a popular phenomenon until the late 1980s. Thirty years later Time Magazine devoted an entire special edition to the Green movement, entitled Earth Day 2000 and distributed it worldwide.

“Right now we are clearly in the growth phase for personal computing. Popular use of the Internet is the accelerator.”

History suggests that once innovative products reach 50 per cent market share, they begin to have a noticeable impact on the economy in general and productivity in particular. The S-Curve pattern for personal computers is very similar to the S-Curve for phones and electricity. The widespread use of the Internet has acted as an accelerator, fundamentally changing how and where we live and work. We are in the Growth phase of the personal computer/Internet S-curve right now, and by 2008 at the latest, 90 per cent of urban and suburban households will be “wired” for the twenty-first century.