The term used to describe a negative outcome from a company prematurely releasing information about future products and impacting sales of their current products. The Osborne Effect is normally seen when the company misjudges the timing for announcing the future products. The phrase "Osborne Effect" is derived from the late 80's when a company called Osborne Computer Corp. introduced the first popular portable computer. Osborne made the mistake of pre-announcing a successor machine months before it could be delivered and sales of its existing line dried up sending the company into a tailspin it never recovered from.
In 1981 the first luggable computer, the Osborne 1, went on sale to become very popular. All was well for Osborne Computer Company until Adam Osborne, in 1983, announced details of the next generation Osborne computers. The resulting sales falloff and eventual demise of OCC created the myth of the Osborne Effect, which is when a company announces a future product and the customers stop buying the current product.
This problem android is facing. Now phones which have upgraded versions like from Ginger bread to ice cream sandwhich will be having demand. People will purchase phones which have upgraded versions and the ones which possess older versions.
This is exactly in part what's happening to Nokia and RIM as we speak, and both incidentally had major strategic product announcements almost immediately after smartphone unit shipments peaked in the fourth quarter of 2010.
In 1981 the first luggable computer, the Osborne 1, went on sale to become very popular. All was well for Osborne Computer Company until Adam Osborne, in 1983, announced details of the next generation Osborne computers. The resulting sales falloff and eventual demise of OCC created the myth of the Osborne Effect, which is when a company announces a future product and the customers stop buying the current product.
This problem android is facing. Now phones which have upgraded versions like from Ginger bread to ice cream sandwhich will be having demand. People will purchase phones which have upgraded versions and the ones which possess older versions.
This is exactly in part what's happening to Nokia and RIM as we speak, and both incidentally had major strategic product announcements almost immediately after smartphone unit shipments peaked in the fourth quarter of 2010.
In February 2011, Nokia and Microsoft made their love affair public, announcing a major strategic partnership that effectively abandoned the Symbian operating system in favor of the software giant's Windows Phone push. Nokia said it would "adopt Windows Phone as its principal smartphone strategy." This was just six months after ex-Microsoft exec Stephen Elop was named Nokia's CEO.
The first fruitful offspring of this union wouldn't be born for another nine months, with theLumia 800 launching in November in the U.K. The first U.S.-bound device would follow shortly, with the Lumia 710 released on T-Mobile's network in January of this year. You can see in that graph what happened to smartphone shipments in the meantime.
Microsoft also recently gave prospective Lumia buyers even more reason to wait, when it said current devices wouldn't be upgradable to the next major version, Windows Phone 8, and that apps made for the new operating system would not be backwards-compatible.
ou promised me, AppleThis is one of many reasons Apple is so notoriously secretive. With the levels of hype that Apple product launches garner, it would undoubtedly crush its own sales if it announced products even months in advance.
Source: Apple.
Source: Apple.
Source: Apple.
Instead, Apple slowly and silently draws down inventory in distribution channels, and then the upgraded product is available immediately (or nearly immediately) after it's announced. When marketing chief Phil Schiller unveiled the new MacBook Pro with Retina display last month, it began shipping same day. This mitigates the risk of getting stuck with unsold, less valuable, and "fundamentally evil" inventory sitting around.
Apple's not entirely immune. After all, its fourth-quarter "miss" with iPhone sales last year was attributed to consumers who postponed iPhone purchases amid the feverish media frenzy over a slightly later-than-usual iPhone launch. In that case, the media coverage was prompting consumers to wait.
Fortunately, the $76.2 billion in cash it had at the end of the previous quarter was just barely enough to get it by before the bill collectors came knocking. That, and it made up for it the very next quarte
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