A demand-based model for forecasting innovation diffusion

This article proposes an innovation diffusion model formalized from a conceptual framework that incorporates several underlying factors determining market demand for new technological products. The model developed here attempts to overcome the common limitation of several existing S-shaped asymptotic growth models that mostly assume that the cumulative demand approaches an upper limit in the long run, which may not be the case for new technological products. In order to illustrate the applicability of our model, time-series demand data for certain products in the electronics and telecommunication market are empirically tested. The results show that our model has higher explanatory power than any other existing models for forecasting demand for all products tested in our study. They also suggest strongly that our model is robust for demand forecasts of various technological products.