When is product innovation too quick for the market?

A few years ago, I realized there is an maximum ability in a market per unit time to absorb products - this is not the market size, but is the ability to buy replacement products. Consider a curve representing sales of all products that are dependent (in a probabilistic sense) on the product in question, then the maximum absorption ability is the slope of this curve.

This is a very real limitation. In the last couple of years, you hear VCs investing in telecommunications equipment tell you buyers were suffering from 'box fatigue' - buyers were tired of the number of telecom devices they had bought, and were less willing to consider a new network element. Indeed, this gave modular switches and routers in the network market a distinct advantage, and is one of the reasons such products enjoy enormous success. I see (anecdotally) a similar limit getting hit in the consumer communication device space, though interestingly, this limit seems to be different in different geographies - an interesting function of consumer psychology and disposable income.

The closest notion I have seen are replacement or adoption curves. Im sure these have been quantified well someplace, I just haven't seen them - I would like to do more than apply generic 'crossing the chasm' or 'S' curves to the problem - but actually draw a curve based on market data that is collectible in advance. Further, I would like to overlay this on a curve representing innovation - x-axis represents time and y-axis represents some measure of expected profitable return on R&D investment - so I can see where I will likely outrun the market's ability to absorb new products.

The upshot of all this? To the academic, this might be an interesting problem to quantify, and see what models might help both gauge and predict this maximum ability to absorb products. To the practicing manager, as technological innovation continues to outrun the market's ability to absorb new products, this could be a very useful tool in making R&D decisions.

In my experience as a product manager and engineer and studying technology companies at business school, large companies [often beholden to wall street] tend to wait for some proof of market adoption before investing [via acquisition?] in new technology whereas startups tend to introduce new products [often] in the hope that markets will prove themselves. Would a more predictive tool as described above destabilize this happy equilibrium?