The Early Peak Effect in the photonics market
Here are the phases:
· Rollout of lasers for a new application
· The early peak in sales
· Saturation of the installed base
· Early wearout and upgrades
· A second “baby boomlet” as replacements for wearouts peak
If you don’t account for the early peak effect, you can overestimate laser sales by assuming that sales continue at peak levels, year after year. The news of new applications have surprisingly wide reach and long tails, feeding the perception that sales are higher than they really are, especially if the application is really cool, like stent cutting.
What keeps the market going is that there are new applications launched on a regular basis that smoothes out the overall growth in the market. But, sales any particular company can be very choppy. And, the mix of products grows more diverse with every new application in the market.
A laser salesperson will recognize the early peak effect, but it gets lost when you look at overall market numbers. It’s not hard to explain to the old-timers in the business, but it doesn’t have a ready label, as far as I know. I couldn’t come up with a better name for it, so for now it’s the “early peak effect.” If you want to call it the “Hausken effect,” that’s fine with me, too.