The digital economy poses fresh challenges and opportunities for research on modeling diffusion of innovations. In spite of promising forecasts, successful diffusion and adoption rate are no longer self-evident in the MP3 player market. This study applies innovation diffusion theory to examine the factors that influence the adoption of MP3 Player. We found that the model we adopted for the current research exhibited better interpretive results than either the base diffusion model or the modified diffusion model. It shows that factoring in pricing, advertising expenditures, and other variable combinations as well as consumers' repetitive purchasing data can effectively enhance the model's predictive ability of sales for portable MP3 players in the Taiwan market. We believe that the model and the research that supports it has important implications for both academics and practitioners in gaining a better understanding of the process for adoption of MP3 player by consumers. The results may provide further insights into MP3 player marketing strategies.
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