Early Adopter

DEFINITION of 'Early Adopter'

An individual or business who uses a new product or technology before others. An early adopter is likely to pay more for the product than later adopters, but accepts this premium if using the product improves efficiency, reduces cost, increases market penetration or simply raises the early adopter's social status. Companies rely on early adopters to provide feedback about product deficiencies, and to cover the cost of the product's research and development.

BREAKING DOWN 'Early Adopter'

The rate of diffusion, or adoption, of a new product by the market at large can vary according to the type of product and its price. Early adopters in the business world face a high level of risk in that they are using a product or technology that may not be perfected, and which may not work with the products used by suppliers and customers or may not be compatible with other products they own.

RELATED TERMS
  1. Early Majority

    The first sizable segment of a population to adopt an innovative ...
  2. Late Majority

    The last sizable segment of a population to adopt an innovative ...
  3. Qualified Adoption Expenses - QAE

    The necessary costs paid to adopt a child younger than 18 years ...
  4. Market Penetration

    A measure of the amount of sales or adoption of a product or ...
  5. Adoption Credit

    A federal tax credit that may be claimed by federal taxpayers ...
  6. Contribution Margin

    A cost accounting concept that allows a company to determine ...
Related Articles
  1. Products and Investments

    How to Create a New Financial Product in 10 Steps

    The 10 steps outlined here are essential to the creation of a new financial product.
  2. Investing

    What's Behind the Decline in Productivity Numbers? 

    There are several theories and hypotheses about low productivity numbers in the American economy. This article examines some of them.
  3. Forex Education

    On This Day In Finance: July 6 - The United States Adopts The Dollar

    The U.S. adopts the dollar as a monetary unit.
  4. Entrepreneurship

    The 3 Most Common Demand Mistakes Entrepreneurs Make

    One of the hardest parts of creating a new product is figuring out if people are actually going to want it.
  5. Term

    How Penetration Pricing Works

    Penetration pricing unveils a new product or service at an initially low price to attract customers away from competitors.
  6. Economics

    Understanding Marketing

    Marketing includes all of the activities of a company associated with buying and selling a product or service.
  7. Economics

    Understanding Product Differentiation

    Product differentiation is a marketing tool companies use to distinguish their products or services from the competition’s.
  8. Investing

    4 Structured Product Types Wealthy Clients Love

    High-net-worth investors find structured products appealing for a variety of reasons. Here's a look at four types.
  9. Retirement

    Footnotes: Early Warning Signs For Investors

    These documents hold very important information, but reading them takes skill.
  10. Analyzing Apple's Threat of New Entrants (AAPL)

    Understanding the competitive forces within an industry can be as simple as looking at five factors. There is the rivalry within the industry itself, but there is also a collective power a company’s ...
RELATED FAQS
  1. What is the difference between research and development and product development?

    Understand the difference between research and development and product development. Learn why a company would want to invest ... Read Answer >>
  2. How is the marginal cost of production used to find an optimum production level?

    Understand more about production cost calculations, and specifically how the marginal cost of production is used to determine ... Read Answer >>
  3. What are some examples of Apple and Google's best-selling product lines?

    Understand what a product line is and what it looks like in the technology industry. Learn about specific examples of technology ... Read Answer >>
  4. How is a product line depth related to a product line?

    Understand what a product line is and why it's important to a company. Learn how product line depth is related to a company's ... Read Answer >>
  5. How can you calculate diminishing marginal returns in Excel?

    Learn more about production costs and applying the law of diminishing marginal returns using Excel. Find out more about how ... Read Answer >>
  6. What impact has robotic production had on profitability in the automotive sector?

    Learn more about the efficiencies and improved profitability created in automotive companies by the use of robotic technologies. ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center