You might have read various customer reactions to Apple’s iPhone price and product line adjustments. Overall, I would bucketize the comments into 5 general categories:

• It is only a fad and you get what you deserve;
• I am extremely angry at Apple for doing this to me;
• They didn’t deliver any of the updated functionality they promised;
• You are an early adopter, you can’t complain about the price;
• Anything & everything else;

So, what does that mean about iPhone customers? Everett Rogers, early researcher on the topic of diffusion of innovations, highlighted the fact that not everyone adopts innovations at the same time or the same rate. In his book, Diffusion of Innovations, 5th Edition, he described the adoption process as a sociological activity where everyone proceeds at her own pace based on her perception of cost/benefit analysis and emotions. Rogers identified 5 categories of adopters, and he observed that if you look at the cumulative number of adopters over time they follow an S-shaped curve.

• Visionaries/innovators have a high level of risk tolerance and the ability to deal with uncertainty. They love new ideas, new technologies, and are willing to deal with setbacks, even if it will cost time and money. In this fashion, they are crucial to the innovation process as they bring new ideas and innovations into society and seed the diffusion process. The first 2.5% of the adopters.
• Early adopters (the next group) are looked upon by society as opinion leaders as they take more time to determine whether to invest or not. Their acceptance of new technologies and innovations increases others’ confidence, and as change agents they speed the diffusion process. Studies have shown that early adoption entails the ability to comprehend and handle complex and ill-defined technologies, and that these individuals tend to be well-educated and well-financed. They represent 13.5% of the category.
• Early majority follows the lead of the early adopters. They are cautions towards change and new ideas. However, once the early adopters’ experiences indicate success, they follow. They represent 34% of adopters.
• Late majority exhibits skepticism and caution, especially if there are unanswered questions about the innovation. However, they respond well to peer pressure and eventually adopt the new technology. They represent 34% of adopters.
• Laggards, as the word indicates, lag behind everyone in the adoption curve. So much so that by the time they adopt a technology, something newer has already been introduced. They represent the final 16% of adopters.

(In case you are wondering… I am an “early adopter” who is offset by a “laggard” hubby (self-proclaimed Luddite). In the end, it is a nice balance for our relationship.)

Apple is expected to have 10% of smartphone sales by the end of 2007, and just after a few months of release they reached their first million handset sales. Considering this, and reading through customer comments, I can’t help but wonder if I am looking at three generations of adopters mixed into one: inventors, early adapters and early majority.

It is evident that we live in a world where the development cycles are continuously shrinking and firms are looking to introduce new products at faster rates. Steve Jobs is pushing it further by readjusting iPhone’s price to be more competitive with the market. However, as our ancestors said, there is time and place for everything and nothing is without consequences.

Previously I looked at the innovation lifecycle and how one can define success goals for each phase in the model . Do you think acceleration of the adoption curve interferes with innovation’s natural progression, as the firm needs to manage the conflicting interests early in the technology’s lifecycle?

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