Life Cycle Analysis of the Optical Disc Industry Market Innovation and Development

Abstract

The rapid advancement of the global optical disc industry results from systematic changes during the product life cycles of digital audio-visual technology. Compact discs (CD) and Digital Versatile Disc (DVD) sales reached record highs in 2004 and 2006 respectively, and the markets continue to shrink as CDs, DVDs, and related consumer electronic products have entered the mature stage of development following the entry of Blu-ray Disc(TM) (BD) products. This research explores the history, evolution, and systematic innovation driven by consumer demands for these products. The research provides a life cycle analysis of technology and market trends for the optical disc industry. Logistic curves are used to model the patent statistics and market values of DVD and BD technologies to document data trends from the mid-1990s till now. The results show that BD technology patent filings rapidly reached the decline point two years after DVD technology matured. The results also show that systematic innovation of optical disc technology is consumer demand driven with BD technology forecasted to replace DVDs in a very short period of time. Technology and market growth curves are used to model the entry times of DVDs and BDs into the mature stage of the product life cycle. The patent based forecasts indicate that new DVD entrants should be cautious since there will be decreasing economic benefits as the new BD technologies gain popularity and market share. The most valuable contribution of this research is the use of the quantitative logistic analytic techniques for technology forecasting incorporating both patent and marketing data. The methodology enables the integrated analysis of technology and marketing intelligence and can be applied to other industry domains and assist the allocation of research funding in their systematic innovation development.