Chasm is a period of demand stagnation that occurs in the process by which innovative technologies spread from the early market to the mass market. In the market, it is seen as a decisive turning point that determines the success or failure of a new technology industry.
The term became widely known through “Crossing the Chasm,” a 1991 book by American management consultant Geoffrey Moore. The English word itself means a “deep gap” or “gorge.” In the technology industry, it is used to describe the divide between early innovation adopters and mass consumers.
New technologies typically spread in the following order: innovators, early adopters, early majority, late majority, and laggards. Early consumers are highly interested in the technology itself.
By contrast, mass consumers prioritize price, stability, and practicality. Chasm refers to the period when growth slows sharply after early demand fades and companies fail to secure mass-market consumers.
The electric vehicle market is often cited as a representative example. Global automakers expanded EV production based on environmental policies and technological advances.
The market showed rapid growth at first. However, in some countries, sales growth slowed as charging infrastructure remained insufficient, prices stayed high, and concerns about battery fires persisted. The industry interpreted this as the EV chasm.
The metaverse industry experienced a similar trend. Market expectations rose as remote services expanded during the COVID-19 pandemic, but the sector revealed limitations in actual consumer usage and revenue models. The slow spread of virtual reality devices and a lack of strong content competitiveness were also noted. As investment enthusiasm quickly cooled, concerns about a chasm spread.
Recently, the possibility of a chasm has also been raised in the generative artificial intelligence (AI) industry. While users of chatbots and AI search services have surged, analysts say verification of corporate profitability and long-term demand is still ongoing. As investment in AI semiconductors and data centers grows, whether these outlays can translate into actual market revenue is seen as a key variable.
Companies are focusing on price cuts and service improvements to get past the chasm. Strategies that enhance product completeness and secure tangible benefits consumers can feel are also being strengthened. Building an industrial ecosystem is another important factor. In the EV market, expanding charging networks is a representative example.
In investment markets, the chasm is sometimes viewed as a temporary correction. It also means the market is being reorganized from early overheating into a more realistic demand structure. On the other hand, industries that lack technological competitiveness or fail to prove market viability may be weeded out during the chasm phase.
Chasm is a term that explains the speed of market diffusion rather than technological progress itself. It is used as a standard for judging whether innovative technologies can lead to actual consumption and changes in industrial structure.
For growth industries, whether they successfully pass through the chasm becomes a variable that determines corporate value and market survival.
