The critical role of market segmentation: Evidence from the audio player market

The aim of this research is the investigate the role played by market segmentation, in general, and by the choice of initial market segment, in particular, in the ability of a product to cross the chasm. To do so, a theoretical framework, enabling to explain the ability of some firms to cross this chasm, while many others remain unsuccessful is developed. The key result of this research is that the choice of initial market segment has crucial importance as adoption in this segment can lead to a cascade of adoption in the other segments. To illustrate this proposition, three cases studies of an historical leader (Sony), a first mover (Archos) and a newcomer (Apple) in the market for digital audio players are presented.