Modelling diffusion of successive generations of technology: a general framework

In today's market where each company is trying to prove itself better than its competitors, companies have to continually bring new generations of their products so as to survive in the market. Each succeeding generation offers some innovative performance or new functionality, distinguishing itself from the past generation. Based on the behavioural assumptions of diffusion theory, this paper proposes an extension of the Bass diffusion model that separates substitution from switching as well as leapfrogging. We also present a relationship between our model and Norton‐Bass model. Empirical implications of the proposed model have been validated on data collected from two industries (semiconductor industry dynamic random access memory shipments of six generations, mainframe industry (USA)). The model describes the growth of these generations quite effectively.