Several empirical regularities characterize the evolution of new markets associated with new technologies.

The key terms and concepts you need to understand are:

Dominant design
Patterns of firm entry and exit in a market

In a subsequent module, we'll also consider the issue of timing of entry in a market (i.e., "first mover" vs. "follower").

I believe the most concise description of industry dynamics that is also both correct and interesting is the following required reading:

Fast Second, Chapter 3.

These are additional readings on industry dynamics, including the writings of the scholars who originated the key ideas.

J. Utterback (1994), “Dominant Designs and the Survival of Firms” Chapter 2 in Mastering the Dynamics of Innovation, Harvard Business School Press, pp. 23-55. [This is very interesting, and provides rich examples with some nice graphs of entry/exit. It is however a bit longer and more detailed than most students prefer. Chapters 3-5 are also excellent.]

P. Geroski (2003). The Evolution of New Markets. Oxford University Press. New York. p. 61-189. [This is an excellent synthesis of the key ideas associated with industry dynamics. However, the book is way too expensive for use as a class reading. Fortunately, many of the ideas and the lively writing style are carried over in the Fast Second required reading.]