Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Early Majority

What it is:

The early majority is a group of people who purchase or try new products -- typically technology -- after a much smaller population of innovators and early adopters have done so.

How it works (Example):

The early majority is one of five types of consumers (the others are innovators, early adopters, late majority, and laggards) along the "Diffusion of Innovations Curve" pioneered by Everett Rogers. Rogers stated that 2.5% of those who embrace a new technology do so very early (the innovators); the early adopters represent the next 13.5% of consumers; the early majority (34% of the adopters) comes next; the late majority (another 34% of the adopters) comes next; and the laggards (16% of the adopters) are the last to try the technology.

For example, the first iPhone, launched in 2007, came with a $600 price tag. Two months later, Apple lowered the price to $400; in June 2009, the price fell again to $200 and the phone offered twice the storage. Nonetheless, early adopters camped out in front of Apple stores and other retailers in 2007 to get their hands on the first version. The early majority, however, is much more likely to wait for the $200 version and might only purchase it after personally hearing stories from innovators and early adopters who have used the product.

Why it Matters:

Rogers characterizes the early majority as a group of thoughtful people who are careful about accepting change. They aren't quite skeptics (that's the late majority), but they aren't quick to try out new technology. Often, they rely on recommendations from those who have used the product already.

Because 34% of consumers are in the early majority, the early majority often represents a first major "wave" of traffic for vendors and producers; that is, the innovators and early adopters can spread the word about a product, and the early majority can bring the profits.

Related Terms View All
  • Qualified Domestic Relations Order (QDRO)
    For example, let's assume that Jane and John are getting divorced. John has a 401(k) with...
  • Named Perils Insurance Policy
    For example, let's say John Doe owns a houseboat. His homeowners insurance policy does...
  • Weak Shorts
    Short-term traders typically only enter a short position long enough to capture a quick...
  • Nanny Tax
    For example, let's say John and Jane Doe hire Sally Smith to take care of their two...
  • Form 1099-DIV
    Let's say that John Doe has an account at Mutual Fund XYZ. The funds pay dividends of $1,...