Sunday, February 19, 2012

Is Apple Immune to the Osborne Effect?

The iPad3. The iPhone5. Both products are expected to be released this year. Both products are expected to offer vast improvements over current versions. Both products are both the best kept secrets and the worst kept secrets at the same time.

So how is it that Apple avoids becoming subject to the “Osborne Effect?” I know, sounds like a rhetorical question but it isn’t. I really do not know how Apple continues to sell monstrous numbers of products when a new model is known to be right around the corner.

Traditionally, car companies highlight new models and various technology enhancements prior to a model being available for purchase yet they go to great lengths to keep the shape of a new fender or front grill from prying eyes. If you knew that the model of car you were thinking of buying was expected to undergo a significant change, would you wait? Would you use the upcoming arrival as a way to get a better price on the existing model?

Apple’s forthcoming iPad3 is pretty much known to have a better screen and a better processor and yet Apple continues to stock the store shelves with iPad2s and is offering no discounts. The iPhone5 is coming and will likely be 4G and have a bigger screen. iPhone 4S is still selling very well. Certainly there is more time between now and the release date for the next iPhone but in the past, sales remained steady up to the release date. Strong enough anyway to deplete the channel of inventory.

Automobile companies have a similar sales strategy but they heavily discount older models in order to get them sold and the price tag makes them less of an impulse buy.

So here’s the big question of the day. What is it about Apple that allows them to continue selling existing models up to the day the new model goes on sale or is this just a myth? Let me know what you think.

1 comment:

  1. As has been shown for the date range of Mid-July 2012 to mid-August 2012, Apple did indeed drop a bit in value, first missed quarter from a reporting standpoint and all due to fans waiting on the iPhone5. At today's close, Apple has hit an all time high value and topped the value of any another company in history. Quite the boomerang and the iPhone5 is not due for another 3 weeks.