Long Term Sales Forecasts of Innovations - An Empirical Study of the Consumer Electronic Market
This paper empirically examines models of replacement sales for six electronic consumer durables - TVs, VCRs, DVD players, Digital Cameras, personal and notebook computers - using data from a large survey of 8077 German households. A new replacement model is developed that fits the empirical quot;lifetablesquot; better than existing models. This said, fitting to replacement sales data was not substantially improved as these fits are not particularly sensitive to mis-specification of the shape of the underlying distribution. Since many product innovations can be targeted at replacement rather than first purchase buyers - this improved understanding of replacement behaviour helps entrepreneurs identify new opportunities