Obsorne effect is a negative outcome for a company in which a company prematurely releases the information of its future products which in return impacts the sales of their current products.People in return of better products in future stop purchasing current products of their company.
The term was coined in 1980's when a company named Obsorne Computers Corporation after releasing a successful portable computer announced prematurely the release of its future products. Customers in anticipation didn't purchase the current products , The sales of the current line-up dried up and the company had to suffer huge losses.
RECENT EXAMPLES:
Recently Microsoft announced that all current Nokia Lumia devices like Nokia Lumia 800 and Nokia Lumia 710 will not be uppgradable to Windows Operating System. The new apps developed by microsoft will also be not compatible with the current lumia devices. The customers may not purchase current lumia products as they may wait for the future Nokia Lumia devices as they will support Windows 8 operating system.
Companies should be clever and a bit tactful while announcing new products. They have to ensure that they get the maximum returns from the existing products. One should follow Apple's policy. They are so secretive while launching new products.With the hype they create with new products, they can easily kill the sales of their existing products. They slowly withdraw the inventories from the stores and display immediately a new product after its launch..Who would like to stuck up with unsold inventory and stocks.
One should be wise in announcing the launch of new products in the market. These small strategies are what which make a company success story or a failure.
YOOOOOOOOOOOOOO
REFERENCES:
http://www.webopedia.com/TERM/O/Osborne_Effect.html
http://www.fool.com/investing/general/2012/07/07/nokia-rim-and-the-osborne-effect-oh-apples-here-to.aspx
The term was coined in 1980's when a company named Obsorne Computers Corporation after releasing a successful portable computer announced prematurely the release of its future products. Customers in anticipation didn't purchase the current products , The sales of the current line-up dried up and the company had to suffer huge losses.
RECENT EXAMPLES:
Recently Microsoft announced that all current Nokia Lumia devices like Nokia Lumia 800 and Nokia Lumia 710 will not be uppgradable to Windows Operating System. The new apps developed by microsoft will also be not compatible with the current lumia devices. The customers may not purchase current lumia products as they may wait for the future Nokia Lumia devices as they will support Windows 8 operating system.
Companies should be clever and a bit tactful while announcing new products. They have to ensure that they get the maximum returns from the existing products. One should follow Apple's policy. They are so secretive while launching new products.With the hype they create with new products, they can easily kill the sales of their existing products. They slowly withdraw the inventories from the stores and display immediately a new product after its launch..Who would like to stuck up with unsold inventory and stocks.
One should be wise in announcing the launch of new products in the market. These small strategies are what which make a company success story or a failure.
YOOOOOOOOOOOOOO
REFERENCES:
http://www.webopedia.com/TERM/O/Osborne_Effect.html
http://www.fool.com/investing/general/2012/07/07/nokia-rim-and-the-osborne-effect-oh-apples-here-to.aspx
A term which seems strange but is rather very cool in the marketing field.
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