Airpods: From Laughing Stock to Top-Seller
https://qz.com/1295361/the-internet-loled-at-airpods-when-they-launched-whos-laughing-now/
Through the topic of social contagion, we learned that in the context of adopting a new technology, people will imitate their friends’ adoptions. We can gain better insight into this situation if we set up just two people’s decisions to choose technology X or Y as a game, where they each get payoff X or Y if they both choose X or Y, respectively, and 0 otherwise. Extending this setup to an ego network, we see that a person’s payoff from choosing X and Y depends on both the value of X and Y, and the fractions of neighbors that are using X and Y. People adopt a new technology if the number of friends using the product, weighted with its payoff value is greater than that of the alternative option (friends * value). Therefore, to optimize a technological diffusion across society, a company can try to maximize (1) the number of connections to someone who has already adopted it for an arbitrary person and (2) the payoff value of the product.
When AirPods were initially introduced, they received a lot of ridicule for looking weird and being unnecessary. This article discusses how airpods spread so quickly to transform from a questionable product to a top-seller. Many of the tactics mentioned directly relate to the two factors I outlined in the first paragraph. Apple made sure that influences knew about and were using AirPods early on. Doing this allowed a vast population to see people that they are connected to were using the AirPods, increasing the fraction of their connections who adopted the technology, thus increasing technological diffusion. Seeing AirPods in the ears of influencers makes people associate AirPods with a lifestyle that they want to emulate. This increases the perceived payoff of the product, lowering the amount of friends that must adopt the product first in order for an individual to also adopt it. By lowering this threshold, more people adopted it, and as the number of people using AirPods increased, the probability that, for someone not yet using AirPods, the (friends * value) value outweighed the alternative increased. These results made the spread of AirPods make sense, and they exemplify how taking advantage of the intuition behind social contagion can create a “boom” for a new technology.