Product Rumors Really Are Bad For Product Makers

As soon as a new model of a product is released we immediately start hearing rumors of the great new features that will ‘definitely’ be in the next model, who are these rumors good for and who are they really bad for?

Yes we all experience it, we are ready to buy a new phone or laptop and we keep hearing about the next model coming out and we can’t decide whether the cling to the old device until the new model is actually released.  Then we wait and the new device has only a few of the features that the rumors are present or the one or two features we were hanging on not being one of those many features that were promised that actually made it.

When I say “promised” I don’t the manufacturer promised, I mean that either a publication decided that these features would be present and pushed their “wet dream list” or repeated something that an Analyst claims to have heard while sitting on the toilet in a bar in a manufacturing City in Taiwan or China or San Francisco.

The trouble is

that these rumors can claims and even launch dates can be made up and be totally fictional or a best guess.  Now with Apple for example, for the better part, they have a schedule that you can almost bank on the iPhone being in the same launch window unless there is a special model launched like the Verizon specific iPhone 4 or the iPhone SE which were launched midway through a year.

The bigger problem is that we get what is commonly referred to as the Osborne Effect which harms the product maker and even Apple is not immune to this effect and why they were always, under Steve Jobs, so very careful about people not knowing the product features or about potential new products or launch dates etc until the last minute.

What is the Osborne Effect?

For those of us that aren’t youngsters we all remember the first ‘luggable’ or portable PC which was created by the Osborne group under Adam Osborne.  It really was a heavy old CP/M based system with all the needed productivity that any businessman of the 80’s needed.

The Osborne 1 sold really well, the company had anticipated just many 10,000 total sales and they sold well in excess of 20,000 each month until rumors of a new model being in development with launch being imminent.  Sales literally died and shortly after the company died too.  They couldn’t get anyone to believe that there was no ‘next model’ on it’s way any time soon and never did get the sales back.

Who is the big loser?

Product rumors really have a big loser, the product maker loses sales.  People hold off spending and the company has a bad quarter or fails completely.  If you look at Apple for example their sales shrink to almost nothing in the few months leading up to the launch of another iPhone iteration and this is also reflected with all the other devices they sell and they aren’t alone.

The other loser is the customer,  they are made to feel that the coming product has all these made up features and it’s the customers that get frustrated when those features they really fell in love with that they had heard about just don’t show up.

Who are the Big Winners?

The biggest winner is the Analysts who manage to sway the stock price enough for their employers to make a decent profit from the purchase or sale of stock in that company.

The other big winners are those websites that report on all these stories and promote them as almost guaranteed.