Tag Archives: Fad

Fad, Niche, or Next Big Thing?

The technology industry has a perennial sport called “The Next Big Thing.” It involves spotting, creating, and being part of the newest technological advance that will change people’s lives. Even though advances seem to arrive overnight, in truth most true innovations take years to reach broad market acceptance.

Why is this important?

Timing is everything. The critical turning point for most technology products or services are when they reach that first 5% to 10% of the potential market. Depending on how they fare among these early adopters, they may either be doomed as fads, may limply hang on, or might break away into widespread use.

Even languishing niche products and services may hold promise for the future, and therefore can garner renewed investment and media attention. One recent example is the ability to make phone calls over the Internet through VoIP/Voice over Internet Protocol. Even though less than 5% of U.S. Home PCs have this as a regular activity, eBay recently committed billions to this market.  [See our TUPdate of December 1, 2005 – “VoIP: Still Calling, But Not an Answer Yet”]

Several other activities are in that same small-market zone and are worthy of note.

Most of the activities that have captured the regular attention of between 5% and 10% of home PCs involve active use. Their nature is markedly different from passive couch-potato-style TV viewing. Although dynamic activities can deliver the stickiness of frequent use so desired by marketers, the demands of regular interaction may discourage use by the broader mass of otherwise passive consumers. Writing a blog takes more ongoing and concerted effort than tuning into a primetime TV program. Indeed, there are nearly twice as many blog contributors than blog initiators.

Sites that help people meet other people are also used by this small group. The many dating services sites from Match.com to eHarmony.com have captured nearly one in fifteen home PCs. Although social networking was expected to skyrocket in the late 90’s, this activity has managed to reach a rather small, focused contingent of social and tech-savvy users.

Home PC Activities Among Small Market Segments

Activities for Which Home PC is Regularly Used (between 5% and 10% of total)

% of U.S. Home PCs

Post a comment on someone else’s blog/online journal

9.2%

Use an online dating service (e.g. Match.com)

7.4%

Create web pages (web publishing)

6.6%

Use a community/social networking group (e.g. Friendster, LinkedIn, Ryze)

5.7%

Write your own blog/online journal (e.g. MySpace, blogspot)

5.3%

Make voice telephone calls/voice chats over the Internet (VoIP)

4.5%

Source: MetaFacts Technology User Profile 2005 Annual Edition

Part of the sport of identifying technology trends involves carefully understanding core behavior. Even though technology itself may be disruptive and evolve quickly, consumer habits do not change quite so quickly. Consumers will gladly shift from one technology to another, causing seemingly fickle behavior to companies invested too deeply in a narrow technology and without their eyes on their customer’s broader activities and choices.

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Filed under Consumer research, Market Research, Trends, TUP 2005, TUPdate