A replacement cycle is the pattern over which capital equipment is replaced, in particular the time from purchase to replacement. They are particularly important in IT, where the replacement cycles are both short and can vary. A key exception are product types that are in early stage growth where most of the demand comes from buyers completely new to the technology.
Replacement cycle can be different for closely related products, or different generations of the same products, or for the same type of product put to different uses (business or consumer, for example). A good example is that replacement cycles of Apple Macs are generally longer than for PCs in general.
Replacement cycles may vary for a number of reasons:
- A technology may mature to the point where it provides all the functionality that buyers want.
- Buyers budgets will vary over time: the replacement cycle is partly cyclical.
- It may be driven by the replacement cycle for another product: the replacement cycle for most hardware is partially driven by software.
- One generation of a product may be more or less enduring than previous generations: for example, CDs last longer than records.
- New releases of software an trigger upgrades of the hardware it runs on. The end of vendor support for old software can trigger both hardware and software upgrades.