Examining the growth of digital wireless phone technology: A take-off theory analysis

The early phase of diffusion plays a critical role in determining information technology (IT) success in a market. Takeoff, the transition point from the introduction to the growth phase in the IT life cycle, is viewed as an acid test for whether a technology will succeed. We develop a theory to understand global takeoff for digital wireless phones that can be extended to other technologies with related characteristics. Drawing on technology dominance and product life cycle theories, we build a model that consists of standards, market competition, technology costs, and technology substitution to explain takeoff and subsequent market penetration growth. The data are from 41 developed and developing countries. The results suggest that the presence and effects of standards play an important role in driving takeoff and penetration growth. Familiarity with wireless phones and an installed base of analog phone technologies also explain faster takeoff times. Non-price factors are important drivers of penetration growth after takeoff as well. Our results have managerial and policy implications on innovative strategies, standards and competition policy settings for digital wireless phones.